Exam 12: Securities Markets

A(n) ________ is a marketable document (a receipt) that certifies a bank holds shares of a foreign firm's stock that backs the receipt.

Jeffery is an underwriter and sells shared on the ________ market for his job. However, in his personal investment life, he will purchase his stocks through the ________ market.

An initial public offering is the first time the company's stock is traded publicly.

Explain the purpose of a brokerage account and the 3 types of brokers.

A primary market is a market in which new, as opposed to previously issued, securities are traded.

The Internet is full of investment information, and all of it is stringently regulated so you can be sure of its reliability.

A circuit breaker protects individual investors from losing money on their investments.

Which of the following purchase orders indicates that you want to buy or sell immediately?

Barney Q. Hopkins borrows stock from his broker (short selling) with the goal of ________ and ________.

A day trader is an individual who trades with a very long-term investment horizon.

Discount brokers are so named because they are able to get you discounts on the market price of stocks.

You have been watching a stock that has dramatically increased in price for the last several days. Today it closed at $50 per share. You want to purchase this stock in the morning using your online brokerage account. You are willing to pay up to $53 a share but no higher. What type of purchase order should you use?

A full service broker will always get you a lower share price on your purchases of stock.

The two types of securities offerings in the primary markets are ________ and ________.

Insider trading is both unfair and illegal. It occurs when officers, directors, major stockholders, or others trade securities while ________.

An IPO is the sale of previously issued shares to the general public.

The price at which an individual is willing to sell a security is called the ________.

Investors who trade with a very short time horizon, generally holding onto stocks for only a few hours, are called ________.

Your next-door neighbor, a kind, elderly lady, just discovered that her stock account had been excessively traded in an inappropriate manner, mainly to generate excess commissions. This is an example of ________.

The OTC market is a link-up of dealers, with stringent listing and membership requirements.