Question 1

The NYSE merged with the London Stock Exchange to form the merged company NYSE Euronext.

Accepted Answer

A) True 
 B)False

Question 2

Answer the following questions concerning the given partial stock quote:
   
A) What was the dividend yield?
B) What was the most recent four quarters of earnings per share?
C) Valued at the closing price,what was the total dollar volume of shares traded?
D) What was the stock price at the beginning of the year?

Accepted Answer

a. The dividend yield = $1.3/$53.75 = 2.

Question 3

In the event of bankruptcy,a firm's janitor must be paid all of the salary owed to him before stockholders receive anything.

Accepted Answer

A) True 
 B)False

Question 4

In what major ways do stocks differ from bonds?

Accepted Answer

Stocks have the following characteristic

Question 5

Which of the following indexes are value-weighted?
I. NYSE Composite
II. S&P 500
III. NASDAQ Composite
IV. Dow Jones Industrial Average

Accepted Answer

A) I,II,III,and IV 
B) I only 
C) II only 
D) II,III,and IV only 
E) I,II,and III only 
A) I,II,III,and IV 
B) I only 
C) II only 
D) II,III,and IV only 
E) I,II,and III only

Question 6

Why have international stock prices fallen as a result of the subprime crisis in the United States?

Accepted Answer

U.S. economic growth slowed as a result

Question 7

You buy a stock for $34 per share and sell it for $36 after you collect a $1.00 per share dividend. Your pretax capital gain yield is ________ and your pretax dividend yield is ________.

Accepted Answer

A) 2.94 percent; 2.78 percent 
B) 8.82 percent; 0.00 percent 
C) 5.88 percent; 2.94 percent 
D) 5.56 percent; 2.78 percent 
E) 4.65 percent; 3.17 percent 
A) 2.94 percent; 2.78 percent 
B) 8.82 percent; 0.00 percent 
C) 5.88 percent; 2.94 percent 
D) 5.56 percent; 2.78 percent 
E) 4.65 percent; 3.17 percent

Question 8

Rights offering provide existing stockholders the opportunity to purchase shares of new issues to maintain their proportional ownership in the corporation.

Accepted Answer

A) True 
 B)False

Question 9

The age group that holds the most stock as of April 2016 is the ________ group.

Accepted Answer

A) under 35 
B) 35-54 
C) 55 and older 
D) 65 and older 
A) under 35 
B) 35-54 
C) 55 and older 
D) 65 and older

Question 10

A seasoned equity offering occurs when an issuer that already has equity publicly trading issues new shares to the public.

Accepted Answer

A) True 
 B)False

Question 11

What are weak form,semi-strong form,and strong form efficiency? Does one form of efficiency imply another?

Accepted Answer

Weak form efficiency implies that past p

Question 12

The NYSE specialists are charged with
I. trading for their own account.
II. ensuring public limit orders are executed.
III. facilitating processing public market orders.

Accepted Answer

A) I only 
B) I and II only 
C) II and III only 
D) I and III only 
E) I,II,and III 
A) I only 
B) I and II only 
C) II and III only 
D) I and III only 
E) I,II,and III

Question 13

Ethanol Lawn Mowers issued 500,000 shares to the public. The gross proceeds were $31,250,000 and the net proceeds were $30 million. Merrel Bench was the lead underwriter and deal negotiator,but 10 other investment bankers (one of which was Golden Sax)were also used to put up capital and help sell the issue. Which of the following statements is/are correct?
I. The public paid $62.50 a share.
II. Golden Sax was the originating house.
III. The spread per share was $3.50.
IV. Merrel Bench is the sole book running manager.
V. This offer was a syndicated deal.

Accepted Answer

A) I,II,and IV only 
B) III and V only 
C) I,IV,and V only 
D) II and III only 
E) I and V only 
A) I,II,and IV only 
B) III and V only 
C) I,IV,and V only 
D) II and III only 
E) I and V only

Question 14

Data show that since 1942,only 8 of the 14 recessions predicted by the stock market actually occurred. Although stocks are a leading economic indicator,what are some reasons why a stock price decline might not indicate an upcoming recession?

Accepted Answer

Stock prices might drop because equity r

Question 15

Which of the following ADRs is considered the most risky type of ADR?

Accepted Answer

A) Level 1 ADR 
B) Level 2 ADR 
C) Level 3 ADR 
D) Level 4 ADR 
E) Level 5 ADR 
A) Level 1 ADR 
B) Level 2 ADR 
C) Level 3 ADR 
D) Level 4 ADR 
E) Level 5 ADR

Question 16

In a ________ the firm preregisters with the SEC any securities it wishes to sell over the next two years.

Accepted Answer

A) rights 
B) full underwritten 
C) general cash 
D) shelf registration 
E) best efforts 
A) rights 
B) full underwritten 
C) general cash 
D) shelf registration 
E) best efforts

Question 17

A type of absentee ballot that allows a representative to vote on behalf of the stockholder is called a proxy.

Accepted Answer

A) True 
 B)False

Question 18

Suppose a firm has 10 million shares of common stock outstanding and seven candidates are up for election to three seats on the board of directors. If the firm uses cumulative voting to elect its board,what is the minimum number of votes needed to ensure election to the board?

Accepted Answer

A) 3,000,000 
B) 4,285,715 
C) 5,000,000 
D) 7,500,001 
E) 10,000,000 
A) 3,000,000 
B) 4,285,715 
C) 5,000,000 
D) 7,500,001 
E) 10,000,000

Question 19

Dual class stock refers to firms with both common and preferred stock outstanding.

Accepted Answer

A) True 
 B)False

Question 20

The electronic-based market for less actively traded U.S. securities is the

Accepted Answer

A) ADR market. 
B) OTC Bulletin Board. 
C) Pink Sheet stocks. 
D) NYSE Low Volume Market. 
E) ECN Market. 
A) ADR market. 
B) OTC Bulletin Board. 
C) Pink Sheet stocks. 
D) NYSE Low Volume Market. 
E) ECN Market.

Exam 8: Stock Markets

The NYSE merged with the London Stock Exchange to form the merged company NYSE Euronext.

In the event of bankruptcy,a firm's janitor must be paid all of the salary owed to him before stockholders receive anything.

In what major ways do stocks differ from bonds?

Which of the following indexes are value-weighted? I. NYSE Composite II. S&P 500 III. NASDAQ Composite IV. Dow Jones Industrial Average

Why have international stock prices fallen as a result of the subprime crisis in the United States?

You buy a stock for $34 per share and sell it for $36 after you collect a $1.00 per share dividend. Your pretax capital gain yield is ________ and your pretax dividend yield is ________.

Rights offering provide existing stockholders the opportunity to purchase shares of new issues to maintain their proportional ownership in the corporation.

The age group that holds the most stock as of April 2016 is the ________ group.

A seasoned equity offering occurs when an issuer that already has equity publicly trading issues new shares to the public.

What are weak form,semi-strong form,and strong form efficiency? Does one form of efficiency imply another?

The NYSE specialists are charged with I. trading for their own account. II. ensuring public limit orders are executed. III. facilitating processing public market orders.

Data show that since 1942,only 8 of the 14 recessions predicted by the stock market actually occurred. Although stocks are a leading economic indicator,what are some reasons why a stock price decline might not indicate an upcoming recession?

Which of the following ADRs is considered the most risky type of ADR?

In a ________ the firm preregisters with the SEC any securities it wishes to sell over the next two years.

A type of absentee ballot that allows a representative to vote on behalf of the stockholder is called a proxy.

Suppose a firm has 10 million shares of common stock outstanding and seven candidates are up for election to three seats on the board of directors. If the firm uses cumulative voting to elect its board,what is the minimum number of votes needed to ensure election to the board?

Dual class stock refers to firms with both common and preferred stock outstanding.

The electronic-based market for less actively traded U.S. securities is the

Introduction

Determinants of Interest Rates

Interest Rates and Security Valuation

The Federal Reserve System, monetary Policy, and Interest Rates

Money Markets

Bond Markets

Mortgage Markets

Foreign Exchange Markets

Derivative Securities Markets

Commercial Banks: Industry Overview

Commercial Banks Financial Statements and Analysis

Regulation of Commercial Banks

Other Lending Institutions: Savings Institutions, credit Unions, and Finance Companies

Insurance Companies

Securities Firms and Investment Banks

Investment Companies

Pension Funds

Types of Risks Incurred by Financial Institutions

Managing Credit Risk on the Balance Sheet

Managing Liquidity Risk on the Balance Sheet

Managing Interest Rate Risk and Insolvency Risk on the Balance Sheet

Managing Risk Off the Balance Sheet With Derivative Securities

Managing Risk Off the Balance Sheet With Loan Sales and Securitization

Filters

You buy a stock for $34 per share and sell it for $36 after you collect a $1.00 per share dividend. Your pretax capital gain yield is and your pretax dividend yield is .