FINRA SIE FINAL STUDY GUIDE 2023 QUESTIONS AND ANSWERS CORRECT AND VERIFIED-9

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An offering of shares to institutional investors at a discount to the current market price is known as a:   Select one: a.   Initial Public Offering (IPO).   b. Private Placement c. Rights Issue d.   Dividend Reinvestment Plan (DRP).

Define each of the following terms:a. Optimal distribution policyb. Dividend irrelevance theory; bird-in-the-hand theory; tax effect theoryc. Signaling hypothesis; clientele effectd. Residual distribution model; extra dividende. Declaration date; holder-of-record date; ex-dividend date; payment datef. Dividend reinvestment plan (DRIP)g. Stock split; stock dividend; stock repurchase

Solve a,b and c please You wish to create a synthetic equity position. You believe that the price of the stock will decrease over the next year. You have the following securities available to you to create this position. Note that all options are European and Beetroot Inc does not pay dividends.   Current Value of Available Securities Beetroot Inc. Equity: $10.00 Call Premium: $ 5.31 Put Premium: $ 0.50 Strike for Call or Put: $14.00 Call and Put Expiration: 1 year Annual Risk-Free Rate (annually compounded): 3% per year   a) Confirm that the put-call parity holds in this case. b)Specifically, identify the transactions that you will enter into to create your position? c)At expiration, the value of the equity will have increased or decreased. Show how your synthetic position will have the same payoff as a stock-only portfolio. Show this if Beetroot Inc’s equity if the equity value increases to $100 or decreases to $5.

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MCQ

Participating preferred stock offers: O A. Fixed dividend payment over the life of the security B. May raise the dividend over the life of the security C. Will be paid any missed dividends before common shareholders are paid O D. A definitive maturity date

Which one of the following is an example of mental accounting? Multiple Choice O associating a security's gains or losses based on its purchase price calculating the gain or loss on a security on a daily basis O computing the amount of tax due on the gain from a stock sale considering the gain realized when a stock pays a dividend comparing the gains and losses on a portfolio to those of the overall market

Which of the following stock investments should be accounted for using the cost method? Group of answer choices.... Investments of less than 20%. Investments between 20% and 50%. Investments of less than 20% and investments between 20% and 50%. All stock investments should be accounted for using the cost method.

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Question 1 a. Distinguish between the following:i. Primary market and secondary market ii. Money market and capital market iii. Fixed income security and convertible security iv. Systematic risk and Unsystematic risk b. You are an investment advisor and you are asked to guide a new investor to trade shares on the Ghana Stock Exchange (GSE). Explain any six (6) of the listing requirement of GSE that are to be met before the company can start trading on the market.   Question 2 a. A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests in stocks, bonds, short-term money market instruments and other securities. The performance of these mutual funds and the portfolio they build needs to be evaluated as frequently as possible. Evaluating the performance of these mutual funds is important for both existing and potential investors. The Table below provides the average return, standard deviation and betas of selected…

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A closed‑end investment company   Question 11 options:   a)  has a fixed capital structure.   b)  issues new shares when an individual invests.   c)  redeems its shares.   d)  charges a loading fee.

Which of the following correctly ranks the costs of debt (rd), preferred stock (rp), retained earnings (rs), and new common stock (re)?   Question 10 options:   rd < rp < rs < re   rd > rp > rs > re   rp < rs < re < rd   rp < rs < rd < re

The market's reaction to the announcement of a change in the firm's dividend payout is referred to as the:Question 25Answer A. information content effect. B. MM Proposition II. C. MM Proposition I. D. efficient markets hypothesis.

The excess of retirement cost over the original issuance price is Debited to Share Premium - Treasury Shares Debited to Retained Earnings Debited to Share Capital Both a and b respectively Which of the following is an appropriate presentation of treasury stock?" As a marketable security As a deduction at cost from total stockholders' equity As a deduction at cost from total contingent liabilities As a deduction at par from total stockholders' equity