Exam 3: Securities Markets

You short-sell 200 shares of Tuckerton Trading Co.,now selling for $50 per share.What is your maximum possible gain ignoring transactions cost?

The approximate dollar value of trades on the NYSE in 2008 was

Approximately __________ of trades involving shares issued by firms listed on the New York Stock Exchange actually take place on the New York Stock Exchange.

On a given day a stock dealer maintains a bid price of $1000.50 for a bond and an ask price of $1003.25.The dealer made 10 trades which totaled 500 bonds traded that day.What was the dealer's gross trading profit for this security?

When U.S.stock prices were converted from fractions to decimals in 2001 the minimum bid-ask spread charged by dealers ________.

Many exchange-listed securities are also traded in the over-the-counter market.Trading of this sort is said to take place in the ___________.

An investor buys $16,000 worth of a stock priced at $20 per share using 60% initial margin.The broker charges 8% on the margin loan and requires a 35% maintenance margin.The stock pays a $0.50 per share dividend in one year and then the stock is sold at $23 per share.What was the investor's rate of return?

You sell short 300 shares of Microsoft which are currently selling at $30 per share.You post the 50% margin required on the short sale.If you earn no interest on the funds in your margin account what will be your rate of return after one year if Microsoft is selling at $27? (Ignore any dividends)

When matching orders from the public a specialist is required to use the _______.

The ____ requires full disclosure of relevant information relating to the issue of new securities.

A red herring becomes a prospectus when ____.

Rank the following types of markets from least integrated and organized to most integrated and organized. I.Brokered markets II.Continuous auction markets III.Dealer markets IV.Direct search markets

You purchased XYZ stock at $50 per share.The stock is currently selling at $65.Your gains could be protected by placing a _________.

Registered traders _________________.

You purchased 200 shares of ABC common stock on margin at $50 per share.Assume the initial margin is 50% and the maintenance margin is 30%.You will get a margin call if the stock drops below ________.(Assume the stock pays no dividends and ignore interest on the margin loan.)

In ________ markets participants post bid and ask prices at which they are willing to trade,but orders are not automatically executed by computer.____________ execute trades for people other than themselves and in _______________ markets a computer matches orders with an existing limit order book and executes the trades automatically.

You short-sell 200 shares of Tuckerton Trading Co.,now selling for $50 per share.What is your maximum possible loss?

If an investor uses the full amount of margin available,the equity in a margin account used for a stock purchase can be found as ________.

Both the NYSE and Nasdaq have lost market share to ECNs in recent years.Part of Nasdaq's response to the growth of ECNs has been to _______. I.Purchase Instinet,a major ECN II.Enable automatic trade execution through its new Market Center III.Switch from stock ownership to mutual ownership

The _________ price is the price at which a dealer is willing to purchase a security.