Series 7 Exam Question 350: Answer and Explanation

Question: 350

Which of the following DOES NOT describe Treasury stock?

• A. It has no voting rights.
• B. It is stock that was previously authorized but is still unissued.
• C. It is issued stock that has been repurchased by the company.
• D. It does not receive dividends.

Correct Answer: B

Explanation:

B. If you look at Choices B and C, you will see that the answers oppose each other, so one of them has to be the answer to the question. Treasury stock is stock that was issued and subsequently repurchased by the company. Treasury stock has no voting rights and does not receive dividends.