Series 7 - General Securities Representative Exam

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RST corp declares a 1:2 split. Your client, Jimmy, owns 1000 shares. How many shares will Jimmy own after the split?

Not Enough Data to Calculate
A
2500
B
2000
C
500
D

Explanations

1:2 is a reverse split which will decrease the number of shares held by Jimmy. He will end up with 500 shares of the stock and the stock price will increase by approximately double upon the split. A forward split is denoted as 2:1 or 3:1