TAKING THE SIE EXAM? MAKE SURE THAT YOU STUDY AND KNOW CHARACTERISTICS OF EQUITY SECURITIES!
For applicants taking the SIE exam, FINRA's Content Outline for the Securities Industry Essentials (SIE) exam lists knowledge required of equity securities in section 2.1.1. This includes ownership of these securities, order of liquidation, and limited liability of shareholders. It also specifically includes voting rights, the nature of convertible equity securities, and lastly, Rule 144, dealing with with control and restricted securities. Bob Eder J.D. treats each one of these topics in Chapter 3 of Study for the Securities Industry Essentials (SIE) Exam. Here is Bob Eder's treatment of limited liability of common shares: Limited Liability of Common Shares One of the interesting aspects of ownership of common shares is that a shareholder incurs only limited liability for the debts of the issuing corporation. This is not meant to imply that the value of common stock cannot decrease to zero, which it often does for stock of inferior corporations. But no matter how much debt is