Exam 3: Securities Markets

Trades on the __________ are the most likely to trade inside the inside quotes than in other markets.

The __________ system enables exchange members to send orders directly to a specialist over computer lines.

The cost of buying and selling a stock include _________. I.broker's commissions II.dealer's bid-asked spread III.price concessions investors may be forced to make

Under firm commitment underwriting the ______ assumes the full risk that the shares cannot be sold to the public at the stipulated offering price.

Day to day regulation of the New York Stock Exchange and enforcement of exchange rules and federal securities laws is conducted by the

Explicit costs of an IPO tend to be around ______ of the funds raised.

The CFA Institute Standards of Professional Conduct require that members _____.

Initial margin requirements on stocks are set by _________.

Circuit breakers will be imposed if the Dow Jones Industrial Average drops by a minimum of ______ by 2.30 pm.

You sell short 200 shares of Doggie Treats Inc.which are currently selling at $25 per share.You post the 50% margin required on the short sale.If your broker requires a 30% maintenance margin,at what stock price will you get a margin call? (You earn no interest on the funds in your margin account and the firm does not pay any dividends)

According to SEC Rule 415 regarding shelf registration,firms can gradually sell securities to the public for __________ following initial registration.

The difference between the price at which a dealer is willing to buy,and the price at which a dealer is willing to sell,is called the _________.

Restrictions on trading involving insider information apply to _________. I.corporate officers and directors II.major stockholders III.relatives of corporate directors and officers

Which Congressional action directed the SEC to implement a national competitive securities market?

The primary market where new security issues are offered to the public is a good example of _________.

Trading on insider information is ____. I.prohibited by federal law II.prohibited by the CFA Institute Standards of Professional Conduct III.legal in Japan

An investor puts up $5,000 but borrows an equal amount of money from their broker to double the amount invested to $10,000.The broker charges 7% on the loan.The stock was originally purchased at $25 per share and in one year the investor sells the stock for $28.The investor's rate of return was ____.

The NYSE recently acquired the ECN _______ and NASDAQ recently acquired the ECN ________.

The __________ was established to protect investors from losses if their brokerage firms fail.

The issue process where investors submit bids for a new issue and the shares in an IPO are allocated to the highest bidders until the entire issue is sold is called a