Question 1

The syndicate
1. facilitates the sale of new securities
2. is formed by the originating house
3. creates a secondary market in stocks

Accepted Answer

A) 1 and 2 
B) 1 and 3 
C) 2 and 3 
D) all of the above 
A) 1 and 2 
B) 1 and 3 
C) 2 and 3 
D) all of the above

Question 2

Bid and ask price quotations for over-the-counter stocks are not available through the Internet.

Accepted Answer

A) True 
 B)False

Question 3

An investor sells 100 shares short at $43. The sale requires a margin deposit equal to 60 percent of the proceeds of the sale. The company paid a cash dividend of $2 per share. If the investor closed the position at $36, what was the percentage earned or lost on the investment?

Accepted Answer

This problem repeats the previous proble

Question 4

A "round lot" is the general unit for trading in a security.

Accepted Answer

A) True 
 B)False

Question 5

After purchasing stock, an investor may place a stop loss order to sell if the stock's price declines.

Accepted Answer

A) True 
 B)False

Question 6

American Depository Receipts represent

Accepted Answer

A) American stocks traded abroad 
B) European stocks traded in Europe 
C) foreign stocks traded in the U.S. 
D) American and foreign stocks traded OTC 
A) American stocks traded abroad 
B) European stocks traded in Europe 
C) foreign stocks traded in the U.S. 
D) American and foreign stocks traded OTC

Question 7

If a stock is quoted 12.79-13.02, an investor can buy the stock for 13.02.

Accepted Answer

A) True 
 B)False

Question 8

In an "underwriting" the investment banker guarantees the firm selling the securities a specified amount of funds.

Accepted Answer

A) True 
 B)False

Question 9

The purchase of 53 shares of IBM is an odd lot.

Accepted Answer

A) True 
 B)False

Question 10

An investor sells 100 shares short at $43. The sale requires a margin deposit equal to 60 percent of the proceeds of the sale. If the investor closes the position at $49, what was the percentage earned or lost on the investment? If the position had been closed when the price of the stock was $27, what would have been the percent earned or lost on the position?

Accepted Answer

Proceeds of the sale $43×100=$4,300 
Mar

Question 11

The New York Stock Exchange is an example of a secondary market.

Accepted Answer

A) True 
 B)False

Question 12

Investors are insured against loss from brokerage firm failure by the SEC.

Accepted Answer

A) True 
 B)False

Question 13

If a stock is quoted 20.04-20.25, an investor can sell the stock for 20.25.

Accepted Answer

A) True 
 B)False

Question 14

A short position is premised on securities prices rising.

Accepted Answer

A) True 
 B)False

Question 15

The margin requirement is set by the

Accepted Answer

A) Federal Reserve 
B) SEC 
C) FDIC 
D) SIPC 
A) Federal Reserve 
B) SEC 
C) FDIC 
D) SIPC

Question 16

If an investor buys stock on margin and the price of the stock rises, the investor will not receive a margin call from the broker.

Accepted Answer

A) True 
 B)False

Question 17

A direct transfer of funds from savers to firms occurs when new securities are issued in the primary market.

Accepted Answer

A) True 
 B)False

Question 18

The margin requirement sets the maximum cash investment the individual investor must remit.

Accepted Answer

A) True 
 B)False

Question 19

The purpose of the federal securities laws is to provide investors with data and facts so they can make informed investment decisions.

Accepted Answer

A) True 
 B)False

Question 20

The Sarbanes-Oxley law

Accepted Answer

A) reduces potential conflicts of interest between securities analysts and investment bankers 
B) legalizes the sale of securities by investment bankers 
C) requires corporate directors to own stock 
D) mandates that securities analysts file their recommendations with the SEC 
A) reduces potential conflicts of interest between securities analysts and investment bankers 
B) legalizes the sale of securities by investment bankers 
C) requires corporate directors to own stock 
D) mandates that securities analysts file their recommendations with the SEC

The syndicate 1. facilitates the sale of new securities 2. is formed by the originating house 3. creates a secondary market in stocks

Bid and ask price quotations for over-the-counter stocks are not available through the Internet.

An investor sells 100 shares short at $43. The sale requires a margin deposit equal to 60 percent of the proceeds of the sale. The company paid a cash dividend of $2 per share. If the investor closed the position at $36, what was the percentage earned or lost on the investment?

A "round lot" is the general unit for trading in a security.

After purchasing stock, an investor may place a stop loss order to sell if the stock's price declines.

American Depository Receipts represent

If a stock is quoted 12.79-13.02, an investor can buy the stock for 13.02.

In an "underwriting" the investment banker guarantees the firm selling the securities a specified amount of funds.

The purchase of 53 shares of IBM is an odd lot.

The New York Stock Exchange is an example of a secondary market.

Investors are insured against loss from brokerage firm failure by the SEC.

If a stock is quoted 20.04-20.25, an investor can sell the stock for 20.25.

A short position is premised on securities prices rising.

The margin requirement is set by the

If an investor buys stock on margin and the price of the stock rises, the investor will not receive a margin call from the broker.

A direct transfer of funds from savers to firms occurs when new securities are issued in the primary market.

The margin requirement sets the maximum cash investment the individual investor must remit.

The purpose of the federal securities laws is to provide investors with data and facts so they can make informed investment decisions.

The Sarbanes-Oxley law

An Introduction to Investments

The Time Value of Money

Financial Planning, Taxation and the Efficiency of Financial Markets

Risk and Portfolio Management

Investment Companies: Mutual Funds

Closed-End Investment Companies, Real Estate Investment Trusts Reits, and Exchange-Traded Funds Etfs

Stock

The Valuation of Common Stock

Investment Returns and Aggregate Measures of Stock Markets

The Macroeconomic Environment for Investment Decisions

Behavioral Finance and Technical Analysis

The Bond Market

The Valuation of Fixed-Income Securities

Government Securities

Convertible Bonds and Convertible Preferred Stock

An Introduction to Options

Option Valuation and Strategies

Commodity and Financial Futures

Financial Planning and Investing in an Efficient Market Context

Filters

Exam 2: Securities Markets

The syndicate 1. facilitates the sale of new securities 2. is formed by the originating house 3. creates a secondary market in stocks

Bid and ask price quotations for over-the-counter stocks are not available through the Internet.

An investor sells 100 shares short at $43. The sale requires a margin deposit equal to 60 percent of the proceeds of the sale. The company paid a cash dividend of $2 per share. If the investor closed the position at $36, what was the percentage earned or lost on the investment?

A "round lot" is the general unit for trading in a security.

After purchasing stock, an investor may place a stop loss order to sell if the stock's price declines.

American Depository Receipts represent

If a stock is quoted 12.79-13.02, an investor can buy the stock for 13.02.

In an "underwriting" the investment banker guarantees the firm selling the securities a specified amount of funds.

The purchase of 53 shares of IBM is an odd lot.

The New York Stock Exchange is an example of a secondary market.

Investors are insured against loss from brokerage firm failure by the SEC.

If a stock is quoted 20.04-20.25, an investor can sell the stock for 20.25.

A short position is premised on securities prices rising.

The margin requirement is set by the

If an investor buys stock on margin and the price of the stock rises, the investor will not receive a margin call from the broker.

A direct transfer of funds from savers to firms occurs when new securities are issued in the primary market.

The margin requirement sets the maximum cash investment the individual investor must remit.

The purpose of the federal securities laws is to provide investors with data and facts so they can make informed investment decisions.

The Sarbanes-Oxley law

An Introduction to Investments

The Time Value of Money

Financial Planning, Taxation and the Efficiency of Financial Markets

Risk and Portfolio Management

Investment Companies: Mutual Funds

Closed-End Investment Companies, Real Estate Investment Trusts Reits, and Exchange-Traded Funds Etfs

Stock

The Valuation of Common Stock

Investment Returns and Aggregate Measures of Stock Markets

The Macroeconomic Environment for Investment Decisions

Behavioral Finance and Technical Analysis

The Bond Market

The Valuation of Fixed-Income Securities

Government Securities

Convertible Bonds and Convertible Preferred Stock

An Introduction to Options

Option Valuation and Strategies

Commodity and Financial Futures

Financial Planning and Investing in an Efficient Market Context

Filters