Online Access Free RSE Practice Test

How are cash flows from investing activities typically classified in the statement of cash flows?

• A.They include purchases and sales of long-term assets
• B.They include cash transactions from core operations
• C.They indicate the company's debt servicing
• D.They indicate the issuance of new shares or bonds

Which of the following best describes the voting rights of most preferred shareholders?

• A.They generally do not have them, but may gain them if dividends remain unpaid
• B.They are required to approve any company mergers and acquisitions
• C.They can be used on all corporate decisions alongside common shareholder votes
• D.They are gained once investors hold shares for a certain period

An investor owns 600 common shares trading at $45 per share. The company declares a 3-for-2 stock split.
Assuming no market movement, what should the investor hold immediately after the split?

• A.600 shares trading at approximately $30
• B.900 shares trading at approximately $30
• C.900 shares trading at approximately $45
• D.400 shares trading at approximately $67.50

A Portfolio Manager, while discussing the performance of their strategy, mentioned that the maximum drawdown for the strategy over the last 20 years was 15%. What does this mean for the return of the strategy over the 20 years?

• A.The strategy has a 15% probability of loss
• B.The strategy suffered a largest peak-to-trough decline of 15%
• C.The strategy declined 15% in its worst year
• D.The strategy declined a total of 15% per year

An investor, tracking shares in a Canadian mining company, learns the firm announces a 1-for-4 stock consolidation to meet exchange requirements. Which statement best captures how this changes their shareholding, considering market reactions?

• A.More shares, with price dropping but boosting liquidity
• B.Fewer shares, with price rising but possibly unsettling investors
• C.Higher total value, supporting growth but limiting trading ease
• D.Unchanged shares, maintaining value but facing market doubt