Exam 3: Securities Markets

Private placements can be advantageous rather than public issue because ______. I.private placements are cheaper to market than public issues II.private placements may still be sold to the general public under SEC Rule 144A III.privately placed securities trade on secondary markets

The New York Stock Exchange is a good example of _________.

The SIPC was established by the ____.

You purchased 250 shares of common stock on margin for $25 per share.The initial margin is 65% and the stock pays no dividend.Your rate of return would be __________ if you sell the stock at $32 per share.Ignore interest on margin.

The fully automated trade-execution system installed on the NYSE is called

The bid-ask spread exists because of _______________.

Which one of the following statements about IPOs is not true?

Most European markets,including Euronext,use a/an _____________________.

Which of the following statements about Saitoris in Japanese stock markets is incorrect?

Brokerage firms can change margin-loan practices ____.

The ______________ is the most important dealer market in the U.S.and the ______________ is the most important auction market.

Barnegat Light sold 200,000 shares in an initial public offering.The underwriter's explicit fees were $90,000.The offering price for the shares was $35,but immediately upon issue,the share price jumped to $43.What is the best estimate of the total cost to Barnegat Light of the equity issue?

You sold short 300 shares of common stock at $30 per share.The initial margin is 50%.You must put up _________.

Which of the following are true concerning short sales of exchange listed stocks? I.A short sale is permitted only if the last recorded change in the stock's price was positive II.Proceeds from the short sale must be kept on deposit with the broker III.Short-sellers must post margin with their broker to cover potential losses on the position IV.The short-seller earns interest on any cash deposited with the broker that is used to meet the margin requirement

If the Dow Jones Industrial Average falls by 10% by 11 am,trading will ______.

Nasdaq now offers three listing options.The largest,most actively traded firms are on the

Assume you purchased 500 shares of XYZ common stock on margin at $40 per share from your broker.If the initial margin is 60%,the amount you borrowed from the broker is _________.

What percentage of NYSE transactions is executed by specialists?

Purchases of new issues of stock take place _________.

The margin requirement on a stock purchase is 25%.You fully use the margin allowed to purchase 100 shares of MSFT at $25.If the price drops to $22,what is your percentage loss?