PrepScoreSIE
Start free

SIE Corporate Actions

Corporate actions tests what happens to a shareholder’s position when the issuer changes it: forward and reverse splits, stock and cash dividends, tender offers, mergers and spin-offs. The recurring point is that a split changes share count and price but not the total value held.

Practise this topic freeSee the full outline
Understanding Trading, Customer Accounts and Prohibited Activities · 31%108 questions3% hard
31%of the exam is Understanding Trading, Customer Accounts and Prohibited Activities, the section this topic sits in.
108questions on this topic in the PrepScore bank.
42%are apply-level questions — the dominant cognitive demand here.
3are EXCEPT / NOT items, where the answer is the odd one out.
What the SIE asks

What you actually need to know

  • Forward splits: more shares, proportionally lower price, same total value.
  • Reverse splits, and why an issuer would want one.
  • The four dividend dates, and which one determines who is paid.
  • Tender offers, rights offerings and the adjustments each triggers.
How this topic behaves

What 108 questions on it look like

17 of the 108 questions require arithmetic — 16% of the topic, against a low single-digit share across most of the exam. Practise these with a pen, not by reading.

comparison54%
scenario20%
concept18%
calculation8%

Question-type mix across the 108 questions in this topic.

From the bank

Three real corporate actions questions

With the explanation — which is the part that teaches.

comparison · easy · recall

When an issuer carries out a forward stock split, what is the immediate effect on each shareholder's holding?

  1. AThe same number of shares but a higher price per share and higher total value
  2. BMore shares at a proportionally lower price per share, with the total market value unchangedcorrect
  3. CFewer shares at a proportionally higher price per share, with total value unchanged
  4. DMore shares plus a cash payment equal to the increase in share count
Why B is correct

A forward split increases the number of shares and lowers the price per share in the same proportion, so the investor's total market value is unchanged.

scenario · easy · apply

An issuer announces that it will combine with another company and shareholders will receive details about the transaction. Which corporate action category is most directly involved?

  1. AMerger or acquisitioncorrect
  2. BDay order expiration
  3. CBasis point conversion
  4. DMargin maintenance call
Why A is correct

A merger or acquisition is a corporate action involving a business combination or purchase of one company by another.

concept · easy · recall

Which statement best describes a securities adjustment after a corporate action such as a stock split?

  1. ATerms such as shares, price, or deliverable may be adjusted to reflect the corporate actioncorrect
  2. BThe corporate action removes all need for settlement
  3. CThe corporate action changes every shareholder into a bond creditor
  4. DThe corporate action makes the security a bank deposit
Why A is correct

Corporate actions such as splits can require adjustments to securities terms, share quantities, prices, or deliverables so positions reflect the event.

108 questions on this topic, free to start.

Every one carries the same kind of explanation. Ten a day at no cost, no card.

Create a free account
FAQ

Corporate Actions questions

What happens to your holding in a 2-for-1 split?

You hold twice as many shares at roughly half the price. The total market value of the position is unchanged immediately after the split.

Which dividend date decides who gets paid?

The record date establishes the holders of record; the ex-dividend date determines whether a buyer purchases with or without the dividend.

Does a stock dividend change what you own?

Not in value. It increases the share count and reduces the per-share cost basis proportionally.
Last reviewed 2026-08-28. Exam facts sourced to FINRA’s SIE exam page and the FINRA SIE content outline. Question counts describe the PrepScore bank, not the exam.
Same section
Orders and Strategies151 questionsOther Prohibited Activities150 questionsAnti-money Laundering (AML)145 questionsCommunications with the Public and General Best Interest Obligations and Suitability Requirements139 questions

Practise corporate actions until the rule is automatic.

Real-format questions, an explanation on every answer, and a mistake bank that only clears when you get it right.

Start freeSee pricing