Question 1

When purchasing stock short, you must put up some collateral.

Accepted Answer

A) True 
 B)False  True

Question 2

A ________ is a member of an exchange who oversees the trading in one or more stocks and is generally responsible for maintaining a "fair and orderly" market in those stocks by purchasing or releasing stocks into the market.

Accepted Answer

A)  floor trader 
B)  day trader 
C)  specialist 
D)  monitor 
E)  none of the above 
A)  floor trader 
B)  day trader 
C)  specialist 
D)  monitor 
E)  none of the above C

Question 3

What is the purpose of a circuit breaker for the market?

Accepted Answer

A)  It prevents the market from declining in value. 
B)  It prevents investors from losing money in the market. 
C)  It temporarily stops computerized trading to allow investors to analyze the extraordinary market swings. 
D)  All of the above are correct. 
E)  Only A and B are correct. 
A)  It prevents the market from declining in value. 
B)  It prevents investors from losing money in the market. 
C)  It temporarily stops computerized trading to allow investors to analyze the extraordinary market swings. 
D)  All of the above are correct. 
E)  Only A and B are correct. C

Question 4

Securities include both ________ and ________.

Accepted Answer

A)  stocks; mutual funds 
B)  bonds; mutual funds 
C)  real estate; stocks 
D)  stocks; bonds 
E)  bonds; money market funds 
A)  stocks; mutual funds 
B)  bonds; mutual funds 
C)  real estate; stocks 
D)  stocks; bonds 
E)  bonds; money market funds

Question 5

You have decided to give your stockbroker the power to make trades in the market on your behalf, without notifying you of the trades prior to execution. This is an example of ________.

Accepted Answer

A)  a power agreement 
B)  a discretionary account 
C)  an independent account 
D)  none of the above 
A)  a power agreement 
B)  a discretionary account 
C)  an independent account 
D)  none of the above

Question 6

A group of 100 shares of common stock is referred to as a(n) ________.

Accepted Answer

A)  odd lot 
B)  round lot 
C)  even lot 
D)  square lot 
E)  none of the above 
A)  odd lot 
B)  round lot 
C)  even lot 
D)  square lot 
E)  none of the above

Question 7

According to your text, "falling in love" with your stock is a good idea.

Accepted Answer

A) True 
 B)False

Question 8

The two major organized stock exchanges in the Unites States are the ________ and the ________.

Accepted Answer

A)  AMEX; Chicago 
B)  NYSE; AMEX 
C)  NYSE; Chicago 
D)  NYSE; Pacific 
E)  AMEX; Pacific 
A)  AMEX; Chicago 
B)  NYSE; AMEX 
C)  NYSE; Chicago 
D)  NYSE; Pacific 
E)  AMEX; Pacific

Question 9

Reesa is purchasing stock through the NYSE and the AMEX, as a result she will need to have a different broker to purchase stocks listed on each of these different exchanges.

Accepted Answer

A) True 
 B)False

Question 10

A market order is an order to buy or sell a set number of securities immediately at the best price available.

Accepted Answer

A) True 
 B)False

Question 11

What is the purpose of a margin account and using margin to purchase stocks?

Accepted Answer

A)  A margin account allows you to purchase stocks without using any of your own money. 
B)  A margin account allows you to purchase more shares than you could afford to purchase using only your own money. 
C)  Using margin to purchase more shares gives you the potential to earn a higher return on your investment. 
D)  All of the above are correct. 
E)  Only B and C are correct. 
A)  A margin account allows you to purchase stocks without using any of your own money. 
B)  A margin account allows you to purchase more shares than you could afford to purchase using only your own money. 
C)  Using margin to purchase more shares gives you the potential to earn a higher return on your investment. 
D)  All of the above are correct. 
E)  Only B and C are correct.

Question 12

A(n) ________ order is an order to sell if the price drops below a specified level or buy if the price climbs above a specified level.

Accepted Answer

A)  good-till-cancelled 
B)  stop 
C)  limit 
D)  market 
E)  open 
A)  good-till-cancelled 
B)  stop 
C)  limit 
D)  market 
E)  open

Question 13

A ________ is an order that specifies a securities trade is to be made only at a certain price or better.

Accepted Answer

A)  day order 
B)  market order 
C)  limit order 
D)  GTC order 
E)  none of the above 
A)  day order 
B)  market order 
C)  limit order 
D)  GTC order 
E)  none of the above

Question 14

The price at which an individual investor is willing to buy a security is the bid price.

Accepted Answer

A) True 
 B)False

Question 15

A ________ is an order to sell a security if the price drops below a specified level or to buy if the price climbs above a specified level.

Accepted Answer

A)  GTC order 
B)  market order 
C)  fill-or-kill order 
D)  stop-loss order 
E)  none of the above 
A)  GTC order 
B)  market order 
C)  fill-or-kill order 
D)  stop-loss order 
E)  none of the above

Question 16

Why does it cost so much to trade with a full service broker?

Accepted Answer

A)  Full service brokers offer stock research and investment advice. 
B)  Full service brokers offer many different customer services. 
C)  Full service brokers provide a one-on-one personal relationship with the customer. 
D)  All of the above are correct. 
A)  Full service brokers offer stock research and investment advice. 
B)  Full service brokers offer many different customer services. 
C)  Full service brokers provide a one-on-one personal relationship with the customer. 
D)  All of the above are correct.

Question 17

A discount broker executes trades but does not provide much advice.

Accepted Answer

A) True 
 B)False

Question 18

The collateral an investor must put up when conducting a short sale is known as a margin requirement.

Accepted Answer

A) True 
 B)False

Question 19

Placing a market order exposes the buyer to more risk than placing a limit order.

Accepted Answer

A) True 
 B)False

Question 20

General Electric is the only stock originally listed and still remaining on the "Big Board." This means that its stock is traded on the ________.

Accepted Answer

A)  NASDAQ 
B)  NYSE 
C)  Regional 
D)  AMEX 
E)  International 
A)  NASDAQ 
B)  NYSE 
C)  Regional 
D)  AMEX 
E)  International

When purchasing stock short, you must put up some collateral.

A ________ is a member of an exchange who oversees the trading in one or more stocks and is generally responsible for maintaining a "fair and orderly" market in those stocks by purchasing or releasing stocks into the market.

What is the purpose of a circuit breaker for the market?

Securities include both and .

You have decided to give your stockbroker the power to make trades in the market on your behalf, without notifying you of the trades prior to execution. This is an example of ________.

A group of 100 shares of common stock is referred to as a(n) ________.

According to your text, "falling in love" with your stock is a good idea.

The two major organized stock exchanges in the Unites States are the and the .

Reesa is purchasing stock through the NYSE and the AMEX, as a result she will need to have a different broker to purchase stocks listed on each of these different exchanges.

A market order is an order to buy or sell a set number of securities immediately at the best price available.

What is the purpose of a margin account and using margin to purchase stocks?

A(n) ________ order is an order to sell if the price drops below a specified level or buy if the price climbs above a specified level.

A ________ is an order that specifies a securities trade is to be made only at a certain price or better.

The price at which an individual investor is willing to buy a security is the bid price.

A ________ is an order to sell a security if the price drops below a specified level or to buy if the price climbs above a specified level.

Why does it cost so much to trade with a full service broker?

A discount broker executes trades but does not provide much advice.

The collateral an investor must put up when conducting a short sale is known as a margin requirement.

Placing a market order exposes the buyer to more risk than placing a limit order.

General Electric is the only stock originally listed and still remaining on the "Big Board." This means that its stock is traded on the ________.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Using Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters

Exam 12: Securities Markets

When purchasing stock short, you must put up some collateral.

A ________ is a member of an exchange who oversees the trading in one or more stocks and is generally responsible for maintaining a "fair and orderly" market in those stocks by purchasing or releasing stocks into the market.

What is the purpose of a circuit breaker for the market?

Securities include both ________ and ________.

You have decided to give your stockbroker the power to make trades in the market on your behalf, without notifying you of the trades prior to execution. This is an example of ________.

A group of 100 shares of common stock is referred to as a(n) ________.

According to your text, "falling in love" with your stock is a good idea.

The two major organized stock exchanges in the Unites States are the ________ and the ________.

Reesa is purchasing stock through the NYSE and the AMEX, as a result she will need to have a different broker to purchase stocks listed on each of these different exchanges.

A market order is an order to buy or sell a set number of securities immediately at the best price available.

What is the purpose of a margin account and using margin to purchase stocks?

A(n) ________ order is an order to sell if the price drops below a specified level or buy if the price climbs above a specified level.

A ________ is an order that specifies a securities trade is to be made only at a certain price or better.

The price at which an individual investor is willing to buy a security is the bid price.

A ________ is an order to sell a security if the price drops below a specified level or to buy if the price climbs above a specified level.

Why does it cost so much to trade with a full service broker?

A discount broker executes trades but does not provide much advice.

The collateral an investor must put up when conducting a short sale is known as a margin requirement.

Placing a market order exposes the buyer to more risk than placing a limit order.

General Electric is the only stock originally listed and still remaining on the "Big Board." This means that its stock is traded on the ________.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Using Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters

Securities include both and .

The two major organized stock exchanges in the Unites States are the and the .