SIE Exam Question 223: Answer and Explanation

Question: 223

An investor places an order to buy 250 PPG 62.15 GTC DNR. The stock closes the prior day at 63.10. Further, the stock goes ex dividend for 0.15 and accordingly will open with the market the next day at 62.95. Given these developments, which of the following depicts what the investor's buy order will be as of market opening the next day?

• A. Buy 250 PPG 62.95 GTC DNR
• B. Buy 250 PPG 62.15 GTC DNR
• C. Buy 250 PPG 62 GTC
• D. None of the above

Correct Answer: B

Explanation:

The investor's order will be to buy 250 PPG 62.15 GTC DNR. The buy order remains exactly the same due to the investor stipulating the order to be do not reduce (DNR), and accordingly, the order will not be reduced to reflect the distribution of dividends.