Question 1

A margin call occurs anytime the equity position of the margin account falls below the initial margin.

Accepted Answer

A) True 
 B)False

Question 2

What is the chief advantage of a market order?

Accepted Answer

A market o

Question 3

Mr.Whiner bought 1,000 shares of Sure-Fire,Inc.common stock at $85 and sold it three months later at $73.He lost $12,000 plus commissions on this ill-fated stock purchase.He then contacted the SIPC saying that he wanted to file a claim for his investment losses.Is this loss covered by SIPC?What losses are covered?

Accepted Answer

No.Losses due to a brokerage f

Question 4

Which of the following laws eliminated all fixed commissions?

Accepted Answer

A) Securities Exchange Act of 1934 
B) Securities Acts Amendments of 1975 
C) Investor Advisor Act of 1940 
D) Securities Investor Protection Act of 1970 
A) Securities Exchange Act of 1934 
B) Securities Acts Amendments of 1975 
C) Investor Advisor Act of 1940 
D) Securities Investor Protection Act of 1970

Question 5

Questions are based on the following information:
An investor buys 100 shares of Walmart at $45 per share on margin with an initial margin of 70% and a maintenance margin of 25%.In two months,the stock goes to $56.
-What is the actual margin when the stock price is $56?

Accepted Answer

A) 65.9% 
B) 75.9% 
C) 79.9% 
D) 80.9% 
A) 65.9% 
B) 75.9% 
C) 79.9% 
D) 80.9%

Question 6

The NYSE regulatory triad consists of: ________________________,_________________,and _______________________.

Accepted Answer

the Exchange/NYSE (s

Question 7

The SIPC limit for insurance coverage on cash is _____________________.

Accepted Answer

The answer of The SIPC limit for insurance coverage on...

Question 8

Questions are based on the following information:
An investor buys 100 shares of Walmart at $45 per share on margin with an initial margin of 70% and a maintenance margin of 25%.In two months,the stock goes to $56.
-Below what stock price will a margin call occur?

Accepted Answer

A) $13.50 
B) $54.00 
C) $42.00 
D) $18.00 
A) $13.50 
B) $54.00 
C) $42.00 
D) $18.00

Question 9

What is insider trading?Does it only affect large investors?

Accepted Answer

Insider trading is a breach of fiduciary

Question 10

Which of the following statements regarding commissions charged by full-service brokers is not true?

Accepted Answer

A) Commissions vary by product. 
B) The more complicated the transaction,the higher the commission. 
C) The commission on many bonds is already built into the trade. 
D) There is no commission on U.S.Treasury securities. 
A) Commissions vary by product. 
B) The more complicated the transaction,the higher the commission. 
C) The commission on many bonds is already built into the trade. 
D) There is no commission on U.S.Treasury securities.

Question 11

Small investors often pay brokerage commissions according to the broker's chart of fees.How can this be when rates are negotiable?

Accepted Answer

Small investors are free to ne

Question 12

The initial margin requirement on security trades is set by the:

Accepted Answer

A) SEC. 
B) FINRA. 
C) SIPC. 
D) Federal Reserve. 
A) SEC. 
B) FINRA. 
C) SIPC. 
D) Federal Reserve.

Question 13

Which of the following statements regarding the short interest ratio is true?

Accepted Answer

A) It is calculated as the total shares sold short divided by total shares outstanding. 
B) It indicates the dollar amount needed to cover all short positions. 
C) The higher the ratio,the more bullish investors are. 
D) It is calculated as the amount of shares sold short divided by average trading volume. 
A) It is calculated as the total shares sold short divided by total shares outstanding. 
B) It indicates the dollar amount needed to cover all short positions. 
C) The higher the ratio,the more bullish investors are. 
D) It is calculated as the amount of shares sold short divided by average trading volume.

Question 14

Raymond James and Edward Jones are examples of:

Accepted Answer

A) discount brokers. 
B) wholesale brokers. 
C) full-service brokers. 
D) blue-chip brokers. 
A) discount brokers. 
B) wholesale brokers. 
C) full-service brokers. 
D) blue-chip brokers.

Question 15

What is the difference between the potential gains and losses on long positions versus the potential gains and losses on short sales?

Accepted Answer

On long positions,the potential gain is

Question 16

"Circuit breakers" are program traders that attempt to bypass the exchange regulations.

Accepted Answer

A) True 
 B)False

Question 17

Under SIPC,customer accounts with brokerage firms are insured for up to $1 million.

Accepted Answer

A) True 
 B)False

Question 18

If maintenance margin is not maintained,the broker will:

Accepted Answer

A) sell sufficient securities to ensure the portfolio is compliant with maintenance margin requirements. 
B) sell sufficient securities to ensure the portfolio is compliant with initial margin requirements. 
C) contact the investor with a margin put. 
D) contact the investor with a margin call. 
A) sell sufficient securities to ensure the portfolio is compliant with maintenance margin requirements. 
B) sell sufficient securities to ensure the portfolio is compliant with initial margin requirements. 
C) contact the investor with a margin put. 
D) contact the investor with a margin call.

Question 19

Most short sales are executed by the broker acting as the "lender" of the security sold.

Accepted Answer

A) True 
 B)False

Question 20

The short interest ratio indicates the number of days it would take for short sellers to cover all the shares sold short.

Accepted Answer

A) True 
 B)False

Exam 5: How Securities Are Traded

A margin call occurs anytime the equity position of the margin account falls below the initial margin.

What is the chief advantage of a market order?

Which of the following laws eliminated all fixed commissions?

Questions are based on the following information: An investor buys 100 shares of Walmart at $45 per share on margin with an initial margin of 70% and a maintenance margin of 25%.In two months,the stock goes to $56. -What is the actual margin when the stock price is $56?

The NYSE regulatory triad consists of: ________________________,_________________,and _______________________.

The SIPC limit for insurance coverage on cash is _____________________.

Questions are based on the following information: An investor buys 100 shares of Walmart at $45 per share on margin with an initial margin of 70% and a maintenance margin of 25%.In two months,the stock goes to $56. -Below what stock price will a margin call occur?

What is insider trading?Does it only affect large investors?

Which of the following statements regarding commissions charged by full-service brokers is not true?

Small investors often pay brokerage commissions according to the broker's chart of fees.How can this be when rates are negotiable?

The initial margin requirement on security trades is set by the:

Which of the following statements regarding the short interest ratio is true?

Raymond James and Edward Jones are examples of:

What is the difference between the potential gains and losses on long positions versus the potential gains and losses on short sales?

"Circuit breakers" are program traders that attempt to bypass the exchange regulations.

Under SIPC,customer accounts with brokerage firms are insured for up to $1 million.

If maintenance margin is not maintained,the broker will:

Most short sales are executed by the broker acting as the "lender" of the security sold.

The short interest ratio indicates the number of days it would take for short sellers to cover all the shares sold short.

Understanding Investments

Investment Alternatives

Indirect Investing

Securities Markets and Market Indexes

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

The NYSE regulatory triad consists of: ________________,_,and _______________.