Question 1

The Nasdaq 100 Composite Index is a value-weighted index.

Accepted Answer

A) True 
 B)False

Question 2

The difference between the bid and the ask price is known as the:

Accepted Answer

A)  commission. 
B)  premium. 
C)  quote. 
D)  spread. 
A)  commission. 
B)  premium. 
C)  quote. 
D)  spread.

Question 3

All OTC stocks are included in the Nasdaq.

Accepted Answer

A) True 
 B)False

Question 4

Smaller companies with fewer publicly held shares are more likely to meet the listing requirements of the NYSE.

Accepted Answer

A) True 
 B)False

Question 5

What is the difference between a price-weighted index and a capitalization-weighted (value-weighted) index?

Accepted Answer

A price-weighted series gives

Question 6

Which of the following statements about the NYSE is true?

Accepted Answer

A)  The NYSE is the oldest and most prominent primary market in the U.S. 
B)  Specialists account for over 50 percent of the seats on the NYSE. 
C)  The NYSE is the oldest and most prominent secondary market in the U.S. 
D)  Institutional investors do not trade on the NYSE. 
A)  The NYSE is the oldest and most prominent primary market in the U.S. 
B)  Specialists account for over 50 percent of the seats on the NYSE. 
C)  The NYSE is the oldest and most prominent secondary market in the U.S. 
D)  Institutional investors do not trade on the NYSE.

Question 7

What are the major similarities and differences between a designated market maker (DMM) and a dealer?

Accepted Answer

Both have their own inventory of selecte

Question 8

What are the major advantages of a private placement for the issuer of securities?

Accepted Answer

The issuer avoids SEC registra

Question 9

In a firm commitment underwriting arrangement, the risk of placing the security is typically assumed by the:

Accepted Answer

A)  issuer of the security. 
B)  investment bankers. 
C)  commercial bankers. 
D)  institutional investors. 
A)  issuer of the security. 
B)  investment bankers. 
C)  commercial bankers. 
D)  institutional investors.

Question 10

Stocks that are listed on the NYSE:

Accepted Answer

A)  may trade on a regional exchange, but not in the OTC market. 
B)  may trade in the OTC market, but not on a regional exchange. 
C)  cannot trade on both a regional exchange and the OTC market. 
D)  may trade on either a regional exchange or in the OTC market. 
A)  may trade on a regional exchange, but not in the OTC market. 
B)  may trade in the OTC market, but not on a regional exchange. 
C)  cannot trade on both a regional exchange and the OTC market. 
D)  may trade on either a regional exchange or in the OTC market.

Question 11

Investment bankers operate in the:

Accepted Answer

A)  primary market. 
B)  secondary market. 
C)  tertiary market. 
D)  fourth market. 
A)  primary market. 
B)  secondary market. 
C)  tertiary market. 
D)  fourth market.

Question 12

Seasoned equity issues occur in the secondary market.

Accepted Answer

A) True 
 B)False

Question 13

What document summarizes information about a new security issue?

Accepted Answer

A)  The syndicate offer 
B)  The IPO 
C)  The prospectus 
D)  The shelf registration 
A)  The syndicate offer 
B)  The IPO 
C)  The prospectus 
D)  The shelf registration

Question 14

Find the price- and value-weighted index values for 2019 if the 2020 value is set at 10 for each index.

Accepted Answer

Price-Weighted Index: Find the su

Question 15

Find the return on the price-, value-, and equal-weighted index for 2020.

Accepted Answer

Price-Weighted Index Return = 86.

Question 16

The type of bond with the thinnest secondary market is:

Accepted Answer

A)  agency bonds. 
B)  corporate bonds. 
C)  Treasury bonds. 
D)  municipal bonds. 
A)  agency bonds. 
B)  corporate bonds. 
C)  Treasury bonds. 
D)  municipal bonds.

Question 17

The member that serves as the market maker in a stock on the floor of the NYSE is called the:

Accepted Answer

A)  floor broker. 
B)  exchange governor. 
C)  registered trader. 
D)  designated market maker. 
A)  floor broker. 
B)  exchange governor. 
C)  registered trader. 
D)  designated market maker.

Question 18

EAFE stands for:

Accepted Answer

A)  Equity Analyst in Foreign Equities 
B)  Exchange Automated Foreign Execution 
C)  Europe, Australasia, and the Far East 
D)  Europe, Africa, and the Far East 
A)  Equity Analyst in Foreign Equities 
B)  Exchange Automated Foreign Execution 
C)  Europe, Australasia, and the Far East 
D)  Europe, Africa, and the Far East

Question 19

How do you think the globalization of the securities markets will impact the NYSE and the Nasdaq? What specific developments do you foresee happening for the global marketplace?

Accepted Answer

There will be a higher correlation betwe

Question 20

Which of the following is the major advantage to privately placing a bond?

Accepted Answer

A)  The bond pays a lower interest rate. 
B)  The bond has less risk. 
C)  The direct placement offers tax advantages. 
D)  The firm saves issuing costs. 
A)  The bond pays a lower interest rate. 
B)  The bond has less risk. 
C)  The direct placement offers tax advantages. 
D)  The firm saves issuing costs.

Exam 4: Securities Markets and Market Indexes

The Nasdaq 100 Composite Index is a value-weighted index.

The difference between the bid and the ask price is known as the:

All OTC stocks are included in the Nasdaq.

Smaller companies with fewer publicly held shares are more likely to meet the listing requirements of the NYSE.

What is the difference between a price-weighted index and a capitalization-weighted (value-weighted) index?

Which of the following statements about the NYSE is true?

What are the major similarities and differences between a designated market maker (DMM) and a dealer?

What are the major advantages of a private placement for the issuer of securities?

In a firm commitment underwriting arrangement, the risk of placing the security is typically assumed by the:

Stocks that are listed on the NYSE:

Investment bankers operate in the:

Seasoned equity issues occur in the secondary market.

What document summarizes information about a new security issue?

Find the price- and value-weighted index values for 2019 if the 2020 value is set at 10 for each index.

Find the return on the price-, value-, and equal-weighted index for 2020.

The type of bond with the thinnest secondary market is:

The member that serves as the market maker in a stock on the floor of the NYSE is called the:

EAFE stands for:

How do you think the globalization of the securities markets will impact the NYSE and the Nasdaq? What specific developments do you foresee happening for the global marketplace?

Which of the following is the major advantage to privately placing a bond?

Understanding Investments

Investment Alternatives

Indirect Investing

How Securities Are Traded

The Risk and Return From Investing

Portfolio Theory

Portfolio Selection and Asset Allocation

Capital Market Theory and Asset Pricing Models

Common Stock Valuation

Common Stocks: Analysis and Strategy

Market Efficiency

Economymarket Analysis

Sectorindustry Analysis

Company Analysis

Technical Analysis

Bond Yields and Prices

Bonds: Analysis and Strategy

Options

Futures Contracts

Managing Your Financial Assets

Evaluation of Investment Performance

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