Question 1

IPOs are relatively safe investments.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following can be encountered when investing in foreign markets?
I. foreign taxation of dividends
II. different accounting standards for financial disclosure
III. restrictions on types of investments
IV. illiquid markets

Accepted Answer

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

Question 3

Research indicates that investors are more likely to overreact to news when trading after hours.

Accepted Answer

A) True 
 B)False

Question 4

An act explicitly defining and prohibiting insider trading was passed in

Accepted Answer

A)  1934. 
B)  1975. 
C)  1988. 
D)  2002. 
A)  1934. 
B)  1975. 
C)  1988. 
D)  2002.

Question 5

High frequency trading (HFT) accounts for roughly half of all equity trades in the U.S. and Europe.

Accepted Answer

A) True 
 B)False

Question 6

Adding foreign stocks that are riskier than the portfolio average will always increase the risk of the portfolio.

Accepted Answer

A) True 
 B)False

Question 7

Explain the role of investment bankers and brokerage firms in the issuance of new securities.

Accepted Answer

An investment banker assumes the role of

Question 8

Large technology companies such as IBM and Microsoft trade

Accepted Answer

A)  exclusively on the NASDAQ. 
B)  exclusively on the NYSE. 
C)  on either the NASDAQ or the NYSE. 
D)  exclusively on alternative trading systems. 
A)  exclusively on the NASDAQ. 
B)  exclusively on the NYSE. 
C)  on either the NASDAQ or the NYSE. 
D)  exclusively on alternative trading systems.

Question 9

Which of the following is NOT an agency of the United States Government?

Accepted Answer

A)  Bureau of Consumer Financial Protection 
B)  The SEC (Securities Exchange Commission) 
C)  FTC (Federal Trade Commission) 
D)  FINRA (Financial Industry Regulatory Authority) 
A)  Bureau of Consumer Financial Protection 
B)  The SEC (Securities Exchange Commission) 
C)  FTC (Federal Trade Commission) 
D)  FINRA (Financial Industry Regulatory Authority)

Question 10

Primary markets deal in the stocks of larger, well-known companies; secondary markets deal in the stocks of smaller, less well-known companies.

Accepted Answer

A) True 
 B)False

Question 11

The ask price is always _______ the bid price.

Accepted Answer

A)  higher than 
B)  lower than 
C)  equal to 
D)  unrelated to 
A)  higher than 
B)  lower than 
C)  equal to 
D)  unrelated to

Question 12

Assume the foreign exchange rate for the euro was U.S. $1.00 = .91 euro last month. This month, the exchange rate is U.S. $1.00 = .88 euro. This information indicates that over the past month the

Accepted Answer

A)  U.S. dollar remained unchanged relative to the euro. 
B)  U.S. dollar appreciated relative to all foreign currencies. 
C)  euro appreciated relative to the dollar. 
D)  euro depreciated relative to the dollar. 
A)  U.S. dollar remained unchanged relative to the euro. 
B)  U.S. dollar appreciated relative to all foreign currencies. 
C)  euro appreciated relative to the dollar. 
D)  euro depreciated relative to the dollar.

Question 13

Jessica purchased 200 shares of stock at $38 using her 70% margin account. Her maintenance margin is 40%. Jessica has no other securities in her account. At what price will she receive a margin call?

Accepted Answer

A)  $26.60 
B)  $19.00 
C)  $11.40 
D)  $7.60 
A)  $26.60 
B)  $19.00 
C)  $11.40 
D)  $7.60

Question 14

The Securities Act of 1933 deals mostly with primary markets.

Accepted Answer

A) True 
 B)False

Question 15

Describe the initial public offering (IPO) process and explain the role of the underwriter, the Securities and Exchange Commission (SEC), and the red herring.

Accepted Answer

The underwriter is responsible for promo

Question 16

The over the counter market describes transactions

Accepted Answer

A)  that involve the purchase and sale of smaller, unlisted securities. 
B)  that take place in a broker's office. 
C)  that are not reported. 
D)  that are not regulated by the SEC. 
A)  that involve the purchase and sale of smaller, unlisted securities. 
B)  that take place in a broker's office. 
C)  that are not reported. 
D)  that are not regulated by the SEC.

Question 17

Capital markets deal exclusively in stock. Money markets deal exclusively in debt instruments.

Accepted Answer

A) True 
 B)False

Question 18

William purchased 1000 shares of stock at a price of $32 a share. He utilized his 50% margin account to make the purchase. What is William's initial equity in this investment?

Accepted Answer

A)  -$16,000 
B)  $16,000 
C)  $48,000 
D)  $32,000 
A)  -$16,000 
B)  $16,000 
C)  $48,000 
D)  $32,000

Question 19

Including foreign investments in a portfolio

Accepted Answer

A)  increases the overall risk of the portfolio. 
B)  reduces the potential rate of return. 
C)  provides potential benefits from changes in currency values. 
D)  limits the diversification amongst industries. 
A)  increases the overall risk of the portfolio. 
B)  reduces the potential rate of return. 
C)  provides potential benefits from changes in currency values. 
D)  limits the diversification amongst industries.

Question 20

At the market close on June 13, 2019 Alphabet Inc. (GOOG) common stock was trading at an ask price of $1,099.99 and a bid price of $1,082.04. What is the bid/ask spread?

Accepted Answer

A)  $17.95 
B)  $14.32 
C)  1.017x 
D)  .9837 
A)  $17.95 
B)  $14.32 
C)  1.017x 
D)  .9837

IPOs are relatively safe investments.

Which of the following can be encountered when investing in foreign markets? I. foreign taxation of dividends II. different accounting standards for financial disclosure III. restrictions on types of investments IV. illiquid markets

Research indicates that investors are more likely to overreact to news when trading after hours.

An act explicitly defining and prohibiting insider trading was passed in

High frequency trading (HFT) accounts for roughly half of all equity trades in the U.S. and Europe.

Adding foreign stocks that are riskier than the portfolio average will always increase the risk of the portfolio.

Explain the role of investment bankers and brokerage firms in the issuance of new securities.

Large technology companies such as IBM and Microsoft trade

Which of the following is NOT an agency of the United States Government?

Primary markets deal in the stocks of larger, well-known companies; secondary markets deal in the stocks of smaller, less well-known companies.

The ask price is always _______ the bid price.

Assume the foreign exchange rate for the euro was U.S. $1.00 = .91 euro last month. This month, the exchange rate is U.S. $1.00 = .88 euro. This information indicates that over the past month the

Jessica purchased 200 shares of stock at $38 using her 70% margin account. Her maintenance margin is 40%. Jessica has no other securities in her account. At what price will she receive a margin call?

The Securities Act of 1933 deals mostly with primary markets.

Describe the initial public offering (IPO) process and explain the role of the underwriter, the Securities and Exchange Commission (SEC), and the red herring.

The over the counter market describes transactions

Capital markets deal exclusively in stock. Money markets deal exclusively in debt instruments.

William purchased 1000 shares of stock at a price of $32 a share. He utilized his 50% margin account to make the purchase. What is William's initial equity in this investment?

Including foreign investments in a portfolio

At the market close on June 13, 2019 Alphabet Inc. (GOOG) common stock was trading at an ask price of $1,099.99 and a bid price of $1,082.04. What is the bid/ask spread?

The Investment Environment

Investment Information and Securities Transactions

Return and Risk

Modern Portfolio Concepts

Common Stocks

Analyzing Common Stocks

Stock Valuation

Market Efficiency and Behavioral Finance

Fixed-Income Securities

Bond Valuation

Mutual Funds and Exchange-Traded Funds

Managing Your Own Portfolio

Options: Puts and Calls

Futures Markets and Securities

Filters

Exam 2: Securities Markets and Transactions

IPOs are relatively safe investments.

Which of the following can be encountered when investing in foreign markets? I. foreign taxation of dividends II. different accounting standards for financial disclosure III. restrictions on types of investments IV. illiquid markets

Research indicates that investors are more likely to overreact to news when trading after hours.

An act explicitly defining and prohibiting insider trading was passed in

High frequency trading (HFT) accounts for roughly half of all equity trades in the U.S. and Europe.

Adding foreign stocks that are riskier than the portfolio average will always increase the risk of the portfolio.

Explain the role of investment bankers and brokerage firms in the issuance of new securities.

Large technology companies such as IBM and Microsoft trade

Which of the following is NOT an agency of the United States Government?

Primary markets deal in the stocks of larger, well-known companies; secondary markets deal in the stocks of smaller, less well-known companies.

The ask price is always _______ the bid price.

Assume the foreign exchange rate for the euro was U.S. $1.00 = .91 euro last month. This month, the exchange rate is U.S. $1.00 = .88 euro. This information indicates that over the past month the

Jessica purchased 200 shares of stock at $38 using her 70% margin account. Her maintenance margin is 40%. Jessica has no other securities in her account. At what price will she receive a margin call?

The Securities Act of 1933 deals mostly with primary markets.

Describe the initial public offering (IPO) process and explain the role of the underwriter, the Securities and Exchange Commission (SEC), and the red herring.

The over the counter market describes transactions

Capital markets deal exclusively in stock. Money markets deal exclusively in debt instruments.

William purchased 1000 shares of stock at a price of $32 a share. He utilized his 50% margin account to make the purchase. What is William's initial equity in this investment?

Including foreign investments in a portfolio

At the market close on June 13, 2019 Alphabet Inc. (GOOG) common stock was trading at an ask price of $1,099.99 and a bid price of $1,082.04. What is the bid/ask spread?

The Investment Environment

Investment Information and Securities Transactions

Return and Risk

Modern Portfolio Concepts

Common Stocks

Analyzing Common Stocks

Stock Valuation

Market Efficiency and Behavioral Finance

Fixed-Income Securities

Bond Valuation

Mutual Funds and Exchange-Traded Funds

Managing Your Own Portfolio

Options: Puts and Calls

Futures Markets and Securities

Filters