This is a SIE Exam Lesson 4 Free Quiz which is covering Special Securities. Try it and see how you do if you need help listen to the lesson over.

SIE Exam Lesson 4 Free Quiz

This is a SIE Exam Lesson 4 Free Quiz which is covering Preferred Stocks. Try it and see how you do if you need help listen to the lesson over.

Questions covered include

1. These are rights to purchase stock at specific prices that are long-term in nature.

A. purchasing rights

B. preemptive rights

C. option rights

D. warrants

2. To which of the following can warrants be attached to?

A. sale of a common stock

B. sale of a preferred stock

C. sale of a bond

D. all of the above

3. Warrants can be traded but they should be traded along with the stock or bond that comes with them.

A. True

B. False

4. The value of the warrant is based on the ___ that it is tied to.

A. stock

B. dividend of the stock

C. interest rate of the stock

D. par value of the stock

5. Warrants allow trading foreign stocks on the US markets.

A. True

B. False

6. Rights to buy a new stock come about as a result of ___.

A. preemptive rights

B. purchasing rights

C. voting rights

D. warrants

7. How are warrants and rights similar?

A. Both warrants and rights are traded separately from the stock that they are attached to.

B. They both serve as enticement to buy stocks.

C. They are both special securities.

D. all of the above

8. How are warrants and rights different?

A. Warrants are short term in nature while rights are long term in nature.

B. Warrants are long term in nature while rights are short term in nature.

C. Warrants are attached to stocks while rights are not attached to stocks.

D. Rights are attached to stocks while warrants are not attached to stocks.

9. The warrant can be exercised immediately after the issuance of the bond or stock that is attached to it.

A. True

B. False

SIE Exam Lesson 4 Free Quiz: Special Securities: Continued

10. All warrants have expiration dates.

A. True

B. False

11. Why would companies issue warrants?

A. It would lower their tax.

B. It would increase the stock price at the secondary market.

C. It would increase their ability to issue a secondary offering of stocks at a slightly higher price.

D. all of the above

12. In order for a warrant to have an intrinsic value, ___.

A. The warrant must have a price equal to the price of the stock it is attached to.

B. The warrant must have a price higher than the price of the stock it is attached to.

C. The warrant must have a price lower than the price of the stock it is attached to.

D. The warrant must have a constant price regardless of the price of the stock it is attached to.

13. This is a negotiable security that represents securities of a non-U.S. company that trades in the U.S. financial markets.

A. bond

B. right

C. ADR

D. warrant

14. What does ADR stand for?

A. American Dividend Receipts

B. American Differential Receipts

C. American Development Receipts

D. American Depository Receipts

15. The dividends of the ADR are paid ___.

A. in US currency only

B. only in the currency of the country of the investor who bought the ADR

C. in either US currency or the investor’s country currency, whichever has the lower dividend after currency conversion

D. in any currency that the bank offers where the dividend is claimed

16. Non-sponsored ADRs are assembled by banks and brokers without the participation of the issuer of the stock.

A. True

B. False

17. How does the sponsored ADRs and non-sponsored ADRs differ?

A. Issuers of sponsored ADRs does not work with the bank or the broker in creating ADRs while issuers of non-sponsored ADRs work with the bank or the broker in creating ADRs.

B. Issuers of sponsored ADRs must provide annual and quarterly reports in English to the holders of the ADR while this is not required for the issuers of non-sponsored ADRs.

C. Holders of sponsored ADRs have voting and preemptive rights wh...