Exam 2: Securities Markets and Transactions

Megan bought 200 shares of stock at a price of $10 a share. She used her 70% margin account to make the purchase. Megan sold her stock 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?

The dominant exchange for trading options contracts is the . The dominant player in the trading of futures contracts is .

Stocks of many large foreign companies such as Toyota trade on the NYSE as well as on exchanges in their own country.

Most commodity futures are traded on the NYSE Amex.

Which of the following characteristics apply to trading before and after regular hours? I. Most after hours trades match a bid price to a corresponding offer price. II. Most brokerage firms require individual investors to place only market orders for after- hours trades. III. Electronic Communications Networks (ECNs) play a key role in after hours trading. IV. After-hours trading begins at 4:00 P.M. and ends at 9:30 A.M. eastern time.

The U.S. stock markets tend to produce the highest rate of return each year.

The automated system for trading highly active regulated OTC securities is the

Dollar-denominated debt securities issued by foreign corporations and traded in U.S. markets are called

Which one of the following is a major advantage of margin trading?

Jocelyn sells short 1000 shares of JKLO stock at $31.25 per share and six months later purchases the shares at $29.00 each. Ignoring margin interest and brokerage fees, Nancy will

If an investor does not respond to a margin call, the broker will

When the offer price is lower than the market price on the first day of trading, the difference is known as

Options contracts on stocks may

The income paid to a market maker is referred to as the spread.

SEC regulations strictly prohibit trading outside the normal hours of 9:30 A.m. to 4:00 P.M. EST.

Which one of the following statements about margin trading is correct?