SIE Understanding Trading, Customer Accounts and Prohibited Activities Question 53: Answer and Explanation

Question: 53

Which of the following results in an increase in treasury stock?

• A. Merger
• B. Buyback
• C. Tender offer
• D. Rights offer

Correct Answer: B

Explanation:

B: Choice B is correct because when the board of directors approves the buyback of stock, treasury stock is the name for the shares acquired on the open market. Choices A, C, and D are incorrect because they do not result in the increase of treasury stock.