Exam 5: How Securities Are Traded

Negotiated commissions are the norm for institutional investors;whereas most individual investors pay specified commissions set by the brokerage firm.

The Securities Investor Protection Corporation (SIPC)insures customer accounts at member brokers against brokerage failure as follows:

Compare and contrast the functions and responsibilities of an NYSE designated market maker (specialist)with those of an OTC dealer.

Margin accounts cannot be used to:

Since 1974,the initial margin requirement for stocks has been:

The NYSE is:

The law that requires that all new issues being offered for public sale to be registered with the SEC is the:

Most securities are sold on a regular way basis,which means the settlement date is one week after the trade date.

Buying Treasury securities through the Treasury Direct Program eliminates all brokerage commissions and other fees.

The interest rate charged on margin accounts is determined by:

For an investor holding individual securities,which of the following generally requires a relatively large minimum investment,usually $100,000 or higher?

Which of the following statements regarding specialists is FALSE?Specialists:

Mr.King has researched a small company whose stock is selling at $7.50.He wants to buy 1,000 shares but thinks that he might get the stock at $7.25.To try to buy the stock at the lower price,he should place a:

Most full-service stockbrokers derive over 80% of their income from customer commissions.

What costs and risks are incurred in using a margin account that are not present in a cash account?

Margin call price is the amount borrowed divided by:

What are two methods of investing in stocks without a broker?