Question 1

NASDAQ stocks:

Accepted Answer

A) are generally foreign stocks. 
B) trade via the Blue Sheets. 
C) are sometimes not listed on organized exchanges. 
D) represent less than 1,000 companies. 
A) are generally foreign stocks. 
B) trade via the Blue Sheets. 
C) are sometimes not listed on organized exchanges. 
D) represent less than 1,000 companies. C

Question 2

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. D

Question 3

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

Accepted Answer

A price-weighted series gives more weight to higher priced stocks,whereas under a value-weighted approach,each stock's importance is based on relative market value,not price per share.

Question 4

The Dow Jones Industrial Average consists of high quality stocks that are considered to be:

Accepted Answer

A) OTC stocks. 
B) cyclical stocks. 
C) blue-chip stocks. 
D) defensive stocks. 
A) OTC stocks. 
B) cyclical stocks. 
C) blue-chip stocks. 
D) defensive stocks.

Question 5

Which of the following is a major difference between the S&P 500 Index and the Dow Jones Industrial Average (DJIA)?Relative to the DJIA,the S&P 500:

Accepted Answer

A) includes stocks with a much smaller average market capitalization. 
B) includes more foreign firms. 
C) is a much broader index. 
D) is more stable. 
A) includes stocks with a much smaller average market capitalization. 
B) includes more foreign firms. 
C) is a much broader index. 
D) is more stable.

Question 6

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 7

In-house trading refers to:

Accepted Answer

A) trades made only on the floor of the exchanges. 
B) direct trades made between OTC dealers. 
C) trades by fund managers without the use of brokers or exchanges. 
D) trades made between specialists on the NYSE. 
A) trades made only on the floor of the exchanges. 
B) direct trades made between OTC dealers. 
C) trades by fund managers without the use of brokers or exchanges. 
D) trades made between specialists on the NYSE.

Question 8

What are the major similarities and differences between a specialist and a
dealer?

Accepted Answer

Both have their own inventory of selecte

Question 9

Stocks traded on NASDAQ are bought and sold from specialists,who are often affiliated with brokerage firms.

Accepted Answer

A) True 
 B)False

Question 10

The issue of common stock of which there are already shares publicly held is known as:

Accepted Answer

A) an IPO. 
B) a secondary market issue. 
C) an EPO. 
D) a seasoned issue. 
A) an IPO. 
B) a secondary market issue. 
C) an EPO. 
D) a seasoned issue.

Question 11

The largest electronic screen-based equity securities market in the U.S.is known as:

Accepted Answer

A) BATS. 
B) Instinet. 
C) Amex. 
D) NASDAQ. 
A) BATS. 
B) Instinet. 
C) Amex. 
D) NASDAQ.

Question 12

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 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

What impact does the increasing amount of institutional investing have on the securities markets today,and what role do you think institutional investors will play in the future?

Accepted Answer

Institutional investors increase the vol

Question 15

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

Accepted Answer

There will be a higher correlation betwe

Question 16

Which of the following limits the usefulness of the S&P 500 Index as a market benchmark?

Accepted Answer

A) It is too heavily weighted with NYSE stocks to be representative. 
B) It is too difficult to calculate for the average investor. 
C) Its use of a base year in its calculations affects its performance. 
D) Its performance can be greatly affected by a small number of stocks. 
A) It is too heavily weighted with NYSE stocks to be representative. 
B) It is too difficult to calculate for the average investor. 
C) Its use of a base year in its calculations affects its performance. 
D) Its performance can be greatly affected by a small number of stocks.

Question 17

Which exchange member is assigned to a specific trading post?

Accepted Answer

A) Commission broker 
B) Floor trader 
C) Specialist 
D) Dealer 
A) Commission broker 
B) Floor trader 
C) Specialist 
D) Dealer

Question 18

Orders on NASDAQ come from market makers,ECNs,and on-line brokers.

Accepted Answer

A) True 
 B)False

Question 19

A large public offering is often handled by a syndicate of investment banking firms,with one lead managing underwriter.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following statements regarding the NASDAQ Stock Market is not true?

Accepted Answer

A) It was less affected by the 2008 financial crisis than the NYSE. 
B) NASDAQ dealers make a market by posting offers to buy or sell securities. 
C) Stocks listed on the NYSE may also trade on NASDAQ. 
D) NASDAQ's electronic trading system provides instantaneous transactions. 
A) It was less affected by the 2008 financial crisis than the NYSE. 
B) NASDAQ dealers make a market by posting offers to buy or sell securities. 
C) Stocks listed on the NYSE may also trade on NASDAQ. 
D) NASDAQ's electronic trading system provides instantaneous transactions.

Exam 4: Securities Markets and Market Indexes

NASDAQ stocks:

The type of bond with the thinnest secondary market is:

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

The Dow Jones Industrial Average consists of high quality stocks that are considered to be:

Which of the following is a major difference between the S&P 500 Index and the Dow Jones Industrial Average (DJIA)?Relative to the DJIA,the S&P 500:

Investment bankers operate in the:

In-house trading refers to:

What are the major similarities and differences between a specialist and a dealer?

Stocks traded on NASDAQ are bought and sold from specialists,who are often affiliated with brokerage firms.

The issue of common stock of which there are already shares publicly held is known as:

The largest electronic screen-based equity securities market in the U.S.is known as:

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

What document summarizes information about a new security issue?

What impact does the increasing amount of institutional investing have on the securities markets today,and what role do you think institutional investors will play in the future?

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

Which of the following limits the usefulness of the S&P 500 Index as a market benchmark?

Which exchange member is assigned to a specific trading post?

Orders on NASDAQ come from market makers,ECNs,and on-line brokers.

A large public offering is often handled by a syndicate of investment banking firms,with one lead managing underwriter.

Which of the following statements regarding the NASDAQ Stock Market is not true?

Understanding Investments

Investment Alternatives

Indirect Investing

How Securities Are Traded

The Risks and Returns From Investing

Portfolio Theory

Portfolio Selection

Asset Pricing Models

Common Stock Valuation

Common Stocks: Analysis and Strategy

Market Efficiency

Economy Market Analysis

Industry Analysis

Company Analysis

Technical Analysis

Bond Yields

Bonds: Analysis and Strategy

Options

Futures

Portfolio Management

Evaluation of Investment Performance

Filters