Exam 2: Markets and Transactions

Maintenance margin is the

Margin trading requires the borrowing of securities.

Investment bankers who join together to share the financial risk associated with buying an entire issue of new securities and reselling them to the public is called a(n)

Including foreign investments in a portfolio

A market maker brings together buyers and sellers in an auction market.

Joseph bought 100 shares of stock at a price of $24 a share, assuming a margin loan of 30%. Joseph sold his shares after a year for $20 a share. Ignoring margin interest and trading costs, what is Joseph's return on investor's equity for this investment?

Which of the following practices is prohibited by Section 1043A of the Corporations Act 2001?

Jim purchased 100 shares of stock at a price of $32 a share, assuming a margin loan of 20%. What is Jim's initial equity in this investment?

Assume the foreign exchange rate for the euro was A$1.00 = .70 euro last month. This month, the exchange rate is A$1.00 = .72 euro. All things equal, the dollar value of European shares

Megan bought 200 shares of stock at a price of $10 a share, assuming a margin loan of 30%. Megan sold her shares after a year for $12 a share. Ignoring margin interest and trading costs, what is Megan's return on investor's equity for this investment?

Firms that list their stock on an exchange can be delisted for failing to meet the requirements of the exchange.

It can be argued that an IPO was overpriced when the IPO produces extraordinarily high rates of return on its first day of trading.

When a person sells an ordinary share short, she or he is betting that the price of the share will fall.

Options allow their holders to sell or to buy another security during a stated period of time at a specified price.

Shares, bonds and mutual fund shares are bought and sold in the capital market.

The governmental agency that oversees the capital markets is the

Short- term securities are bought and sold in the

Short selling requires the borrowing of securities.

Kayla invested A$3,000 and purchased shares of a German corporation when the exchange rate was A$1.00 = .70 euro. After six months, she sold all of the shares for 3,180 euros, when the exchange rate was A$1.00 = .68 euro. No dividends were paid during the time Kayla owned the shares. What is the amount of Kayla's gain or loss on this investment?

Securities that trade in the over- the- counter market are called unlisted securities.