Question 1

Organized securities exchanges include the New York Stock Exchange,the American Stock Exchange,and NASDAQ.

Accepted Answer

A) True 
 B)False

Question 2

All securities must be listed before they may be traded on the American Stock Exchange and regional exchanges.

Accepted Answer

A) True 
 B)False

Question 3

Shelf registration allows firms to register only debt issues with the SEC,and have them available to sell for two years.

Accepted Answer

A) True 
 B)False

Question 4

The term "Big Board" is another name for the NASDAQ market.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following markets allow for nighttime trading?

Accepted Answer

A) American Stock Exchange 
B) New York Stock Exchange 
C) Chicago Board Options Exchange 
D) all the above 
E) none of the above 
A) American Stock Exchange 
B) New York Stock Exchange 
C) Chicago Board Options Exchange 
D) all the above 
E) none of the above

Question 6

The process whereby an underwriting syndicate steps in to buy back securities to prevent a larger price drop than that which has already occurred is called.

Accepted Answer

A) market stabilization 
B) price normalization 
C) dollar cost averaging 
D) all the above 
E) none of the above 
A) market stabilization 
B) price normalization 
C) dollar cost averaging 
D) all the above 
E) none of the above

Question 7

___________________ is an agreement by the investment banker to sell securities of the issuing corporation whereby the investment banker assumes no risk for the possible failure of the flotation.

Accepted Answer

A) A prospectus 
B) An underwriting agreement 
C) A best-effort agreement 
D) none of the above 
A) A prospectus 
B) An underwriting agreement 
C) A best-effort agreement 
D) none of the above

Question 8

__________________ is a technique for trading stocks as a group rather than individually,defined as a minimum of at least 15 different stocks with a maximum value of $1 million.

Accepted Answer

A) A short sale 
B) A stop-loss order 
C) Margin trading 
D) Program trading 
A) A short sale 
B) A stop-loss order 
C) Margin trading 
D) Program trading

Question 9

Which of the following statements is most correct?

Accepted Answer

A) Because global depository receipts are listed on the London Stock Exchange,U.S.investors cannot buy GDRs through a broker in the United States. 
B) Foreign stocks can be traded in the United States if they are registered with the Securities and Exchange Commission. 
C) The fourth market is a market for large blocks of listed stocks that operates outside the confines of the organized exchanges. 
D) All the above statements are correct. 
A) Because global depository receipts are listed on the London Stock Exchange,U.S.investors cannot buy GDRs through a broker in the United States. 
B) Foreign stocks can be traded in the United States if they are registered with the Securities and Exchange Commission. 
C) The fourth market is a market for large blocks of listed stocks that operates outside the confines of the organized exchanges. 
D) All the above statements are correct.

Question 10

Firm commitment flotation costs are typically lower than those of best efforts.

Accepted Answer

A) True 
 B)False

Question 11

A contract that gives the owner the option or choice of selling a particular good at a specified price on or before a specified date is called a (n):

Accepted Answer

A) call option 
B) put option 
C) option on a future 
D) derivative option 
A) call option 
B) put option 
C) option on a future 
D) derivative option

Question 12

Sales of securities that the seller does not own is called a:

Accepted Answer

A) stop-loss order 
B) short sale 
C) limit order 
D) maintenance margin 
A) stop-loss order 
B) short sale 
C) limit order 
D) maintenance margin

Question 13

The Dow-Jones Industrial Average is made up of 30 large blue-chip stocks.

Accepted Answer

A) True 
 B)False

Question 14

All firms can use shelf registration which saves issuers both time and money.

Accepted Answer

A) True 
 B)False

Question 15

The flotation costs of an initial public offering are comprised solely of direct costs and the spread.

Accepted Answer

A) True 
 B)False

Question 16

The regulation of new security sales by individual states is referred to as:

Accepted Answer

A) the registration process 
B) a truth-in-securities requirement 
C) the rating of security quality 
D) Blue-sky laws 
A) the registration process 
B) a truth-in-securities requirement 
C) the rating of security quality 
D) Blue-sky laws

Question 17

Which of the following is not a reason to sell securities in a private placement?

Accepted Answer

A) to keep current shareholders from suspecting "sweetheart deals" 
B) to forestall a hostile takeover 
C) to fulfill a need for an emergency infusion of equity 
D) to reduce dividend payouts to shareholders 
E) none of the above 
A) to keep current shareholders from suspecting "sweetheart deals" 
B) to forestall a hostile takeover 
C) to fulfill a need for an emergency infusion of equity 
D) to reduce dividend payouts to shareholders 
E) none of the above

Question 18

The maximum buying price or the minimum selling price specified by the investor is called a:

Accepted Answer

A) stop-loss order 
B) market order 
C) short sale 
D) limit order 
A) stop-loss order 
B) market order 
C) short sale 
D) limit order

Question 19

Insider trading laws are intentionally designed to be _________________.

Accepted Answer

A) ambiguous 
B) precise 
C) clear 
D) fair 
E) none of the above. 
A) ambiguous 
B) precise 
C) clear 
D) fair 
E) none of the above.

Question 20

A syndicate is a group of several investment banking firms that participate in underwriting and distributing a security issue.

Accepted Answer

A) True 
 B)False

Organized securities exchanges include the New York Stock Exchange,the American Stock Exchange,and NASDAQ.

All securities must be listed before they may be traded on the American Stock Exchange and regional exchanges.

Shelf registration allows firms to register only debt issues with the SEC,and have them available to sell for two years.

The term "Big Board" is another name for the NASDAQ market.

Which of the following markets allow for nighttime trading?

The process whereby an underwriting syndicate steps in to buy back securities to prevent a larger price drop than that which has already occurred is called.

___________________ is an agreement by the investment banker to sell securities of the issuing corporation whereby the investment banker assumes no risk for the possible failure of the flotation.

__________________ is a technique for trading stocks as a group rather than individually,defined as a minimum of at least 15 different stocks with a maximum value of $1 million.

Which of the following statements is most correct?

Firm commitment flotation costs are typically lower than those of best efforts.

A contract that gives the owner the option or choice of selling a particular good at a specified price on or before a specified date is called a (n):

Sales of securities that the seller does not own is called a:

The Dow-Jones Industrial Average is made up of 30 large blue-chip stocks.

All firms can use shelf registration which saves issuers both time and money.

The flotation costs of an initial public offering are comprised solely of direct costs and the spread.

The regulation of new security sales by individual states is referred to as:

Which of the following is not a reason to sell securities in a private placement?

The maximum buying price or the minimum selling price specified by the investor is called a:

Insider trading laws are intentionally designed to be _________________.

A syndicate is a group of several investment banking firms that participate in underwriting and distributing a security issue.

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters

Exam 11: Securities Markets

Organized securities exchanges include the New York Stock Exchange,the American Stock Exchange,and NASDAQ.

All securities must be listed before they may be traded on the American Stock Exchange and regional exchanges.

Shelf registration allows firms to register only debt issues with the SEC,and have them available to sell for two years.

The term "Big Board" is another name for the NASDAQ market.

Which of the following markets allow for nighttime trading?

The process whereby an underwriting syndicate steps in to buy back securities to prevent a larger price drop than that which has already occurred is called.

___________________ is an agreement by the investment banker to sell securities of the issuing corporation whereby the investment banker assumes no risk for the possible failure of the flotation.

__________________ is a technique for trading stocks as a group rather than individually,defined as a minimum of at least 15 different stocks with a maximum value of $1 million.

Which of the following statements is most correct?

Firm commitment flotation costs are typically lower than those of best efforts.

A contract that gives the owner the option or choice of selling a particular good at a specified price on or before a specified date is called a (n):

Sales of securities that the seller does not own is called a:

The Dow-Jones Industrial Average is made up of 30 large blue-chip stocks.

All firms can use shelf registration which saves issuers both time and money.

The flotation costs of an initial public offering are comprised solely of direct costs and the spread.

The regulation of new security sales by individual states is referred to as:

Which of the following is not a reason to sell securities in a private placement?

The maximum buying price or the minimum selling price specified by the investor is called a:

Insider trading laws are intentionally designed to be _________________.

A syndicate is a group of several investment banking firms that participate in underwriting and distributing a security issue.

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters