Deck · FINRA SIE
Understanding Products and Their Risks
Equities, debt, options, packaged products, municipal fund securities, annuities, and the risk taxonomy (44% of the exam).
352 cards · audited · SM-2 spaced repetition
Included with the full FINRA SIE program — 4 decks, 790 cards.
Sample cards
What two fundamental rights does owning common stock give an investor?
The right to vote on corporate matters (e.g., electing the board) and the right to receive dividends if and when the board declares them.
In a corporate liquidation, where do common stockholders stand in the priority of claims?
Last. Common stockholders have a residual claim — they are paid only after secured creditors, unsecured creditors (including bondholders), and preferred stockholders.
What does "limited liability" mean for a common stockholder?
The most a stockholder can lose is the amount invested in the shares — personal assets cannot be reached to satisfy the corporation's debts.
How does statutory voting work?
A shareholder may cast one vote per share owned for each open board seat, but votes cannot be pooled — e.g., 100 shares and 3 seats allows 100 votes per seat.
How does cumulative voting work?
A shareholder's total votes (shares owned × open seats) may be allocated in any combination, including all on a single candidate.
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