Finra Exam Series-6 Topic 5 Question 89 Discussion

Actual exam question for Finra's Series-6 exam

Question #: 89
Topic #: 5

Which of the following is not a feature associated with an investment in preferred stock?

AThe dividend is typically a fixed amount.

BIf a dividend payment is skipped, it must typically be made up before common shareholders can receive any dividends.

CPreferred shareholders usually have the right to vote on members of the board of directors, mergers, and shareholder proposals.

DThe preferred stock may be convertible to common stock.

Show Suggested Answer

Suggested Answer: D

The false statement regarding both a UGMA and a UTMA is that the assets must be re-registered in the minor child's name when the child turns 18. The rule differs between the two types of accounts. The UGMA requires that the assets must be re-registered when the child reaches the ''age of majority,'' as defined by the state, and the definition differs among states. Under the UTMA, the transfer of the account can be delayed until the minor child has reached the age of 25.

by Devorah at Sep 13, 2024, 01:53 PM

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Basilia

2 months ago

This question is making me prefer to not take this exam. Maybe I'll just stick to investing in 'common' sense instead.

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Lucia

18 days ago

C) Preferred shareholders usually have the right to vote on members of the board of directors, mergers, and shareholder proposals.

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Ahmed

1 months ago

B) If a dividend payment is skipped, it must typically be made up before common shareholders can receive any dividends.

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Fabiola

1 months ago

A) The dividend is typically a fixed amount.

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Elmira

2 months ago

I thought preferred stock was the one where you get to wear a fancy hat. Guess I've been investing in the wrong kind of 'preferred' stock.

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Terrilyn

4 days ago

D) The preferred stock may be convertible to common stock.

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Edna

6 days ago

C) Preferred shareholders usually have the right to vote on members of the board of directors, mergers, and shareholder proposals.

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Staci

19 days ago

B) If a dividend payment is skipped, it must typically be made up before common shareholders can receive any dividends.

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Dierdre

1 months ago

A) The dividend is typically a fixed amount.

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Izetta

2 months ago

A, the dividend being fixed, is not a feature of preferred stock. This exam is really testing our knowledge of finance.

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Eleni

2 months ago

D is the correct answer. The ability to convert to common stock is a key feature of preferred stock.

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Kallie

2 months ago

I'm going with B. If a dividend payment is skipped, it does not have to be made up before common shareholders can receive dividends.

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Felicidad

1 months ago

User 2: I agree with you, C seems like the right choice.

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Sharita

1 months ago

User 1: I think C is the correct answer. Preferred shareholders usually have the right to vote on important matters.

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Larae

2 months ago

D) The preferred stock may be convertible to common stock.

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Vanna

2 months ago

I think the answer is C. Preferred shareholders usually don't have voting rights, that's a common feature of preferred stock.

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Fatima

2 months ago

A) The dividend is typically a fixed amount.

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Avery

2 months ago

C) Preferred shareholders usually have the right to vote on members of the board of directors, mergers, and shareholder proposals.

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