Common Stock
An investor owns 200 shares of XYZ stock at $60 per share. After a 3-for-1 stock split, how many shares will the investor own and at what price?
In a 3-for-1 split, the number of shares triples (200 x 3 = 600) while the price is divided by 3 ($60 / 3 = $20). The total value remains unchanged at $12,000.
Complete Analysis & Legal Rationale
In a 3-for-1 split, the number of shares triples (200 x 3 = 600) while the price is divided by 3 ($60 / 3 = $20). The total value remains unchanged at $12,000.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Matches the verified teaching point in the explanation.
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.