Which of the following listed securities carries voting rights?
Answer(s): A
Common Stock: Holders of common stock typically have voting rights, which allow them to participate in decisions like electing the board of directors or approving major corporate actions.Other Securities:Preferred Stock: Usually does not carry voting rights.Corporate and Convertible Bonds: Debt instruments, so they do not confer voting rights.
SEC Guide on Stock Voting Rights: SEC Voting Rights.
Which of the following statements is true of the comparison between penny stocks and blue-chip stocks?
Penny Stocks: These are low-priced, highly speculative stocks often issued by small or distressed companies. They generally have low liquidity, meaning they can be difficult to buy or sell without significantly impacting the price.Incorrect Options:Dividends: Penny stocks rarely pay dividends, unlike blue-chip stocks.Price Stability: Penny stocks are highly volatile compared to blue-chip stocks.Capitalization: Blue-chip companies are far better capitalized.
SEC Bulletin on Penny Stocks: SEC Penny Stocks.
Assuming yields are held constant, which of the following statements describes what will occur as a discount bond reaches maturity?
Discount Bonds: These are issued or traded below par value. Over time, their price moves closer to par as they approach maturity, assuming yields remain constant.Other Options:Par Value Changes: The par value of a bond does not change over time; only its price fluctuates.
SEC and FINRA Bond Basics: SEC Discount Bonds.
Offering 403(b) tax-sheltered annuity accounts to which of the following groups is permissible?
Answer(s): D
403(b) Accounts: These tax-advantaged retirement plans are specifically for employees of public schools, tax-exempt organizations, and certain other nonprofit employers, such as hospitals.Incorrect Options:Volunteer Workers: Ineligible unless they are also employees.Small Business Owners and Military Personnel: These groups typically qualify for other retirement plans, not 403(b).
IRS Publication 571 (403(b) Plans): I, R, S 403(b) Guidance.
Which of the following statements is true about a corporation's balance sheet?
Answer(s): C
Balance Sheet Definition: Shows a company's financial position at a specific point in time, listing assets, liabilities, and shareholders' equity (net worth).Other Financial Statements:Profit and Loss Statement: Summarizes revenues and expenses over a period.Cash Flow Statement: Tracks cash inflows and outflows.
SEC Guide to Financial Statements: SEC Financials.
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