Question 1

With a ____ order, the investor specifies a purchase price that is above the current market price.

Accepted Answer

A) market 
B) limit 
C) stop-loss 
D) stop-buy 
A) market 
B) limit 
C) stop-loss 
D) stop-buy

Question 2

Trading halts are imposed by

Accepted Answer

A) the SEC. 
B) brokers. 
C) stock exchanges. 
D) the Treasury. 
A) the SEC. 
B) brokers. 
C) stock exchanges. 
D) the Treasury.

Question 3

The bid-ask spread is negatively related to

Accepted Answer

A) order costs 
B) inventory costs 
C) risk 
D) trading volume 
A) order costs 
B) inventory costs 
C) risk 
D) trading volume

Question 4

Mark purchases a stock priced at $70. The stock is not expected to pay any dividends in the coming year. Mark thinks he can sell the stock for $100 after one year. If Mark uses his own funds for half of the investment amount and borrows the remainder from his brokerage firm at an annual interest rate of 12 percent, his estimated return on the stock would be ____ percent.

Accepted Answer

A) 42.86 
B) 85.71 
C) 73.71 
D) 30.00 
A) 42.86 
B) 85.71 
C) 73.71 
D) 30.00

Question 5

Which of the following statements is incorrect with respect to the structure of the SEC?

Accepted Answer

A) It is composed of seven commissioners appointed by the president of the United States. 
B) The president selects one commissioner to chair the commission. 
C) Each commissioner serves a five-year term. 
D) Commissioners' terms are staggered. 
E) Commissioners meet to assess whether existing regulations are successfully preventing abuses and to revise the regulations as needed. 
A) It is composed of seven commissioners appointed by the president of the United States. 
B) The president selects one commissioner to chair the commission. 
C) Each commissioner serves a five-year term. 
D) Commissioners' terms are staggered. 
E) Commissioners meet to assess whether existing regulations are successfully preventing abuses and to revise the regulations as needed.

Question 6

The ____ the trading volume of a stock, the ____ the spread.

Accepted Answer

A) larger; wider 
B) larger; narrower 
C) lower; narrower 
D) None of these are correct. 
A) larger; wider 
B) larger; narrower 
C) lower; narrower 
D) None of these are correct.

Question 7

Under the SEC's uptick rule, speculators are prohibited from taking a short position in stocks that have experienced a decline of at least 10 percent for the day, unless the most recent trade resulted in a decrease in the stock price.

Accepted Answer

A) True 
 B)False

Question 8

____ may facilitate stock transactions by taking positions in specific stocks.

Accepted Answer

A) Board members 
B) Capstone members 
C) Market makers 
D) None of these are correct. 
A) Board members 
B) Capstone members 
C) Market makers 
D) None of these are correct.

Question 9

____ are enforced to restrict the amount of credit extended to customers by stockbrokers.

Accepted Answer

A) Limit orders ​ 
B) Margin requirements 
C) Maintenance margins 
D) Initial margins 
A) Limit orders ​ 
B) Margin requirements 
C) Maintenance margins 
D) Initial margins

Question 10

____ may execute transactions on a stock exchange for their clients.

Accepted Answer

A) Board members 
B) Capstone members 
C) Floor brokers 
D) None of these are correct. 
A) Board members 
B) Capstone members 
C) Floor brokers 
D) None of these are correct.

With a ____ order, the investor specifies a purchase price that is above the current market price.

Trading halts are imposed by

The bid-ask spread is negatively related to

Which of the following statements is incorrect with respect to the structure of the SEC?

The the trading volume of a stock, the the spread.

Under the SEC's uptick rule, speculators are prohibited from taking a short position in stocks that have experienced a decline of at least 10 percent for the day, unless the most recent trade resulted in a decrease in the stock price.

____ may facilitate stock transactions by taking positions in specific stocks.

____ are enforced to restrict the amount of credit extended to customers by stockbrokers.

____ may execute transactions on a stock exchange for their clients.

Role of Financial Markets and Institutions

Determination of Interest Rates

Structure of Interest Rates

Functions of the Fed

Monetary Policy

Money Markets

Bond Markets

Bond Valuation and Risk

Mortgage Markets

Stock Offerings and Investor Monitoring

Stock Valuation and Risk

Financial Futures Markets

Options Markets

Swap Markets

Foreign Exchange Derivative Markets

Commercial Bank Operations

Bank Regulation

Bank Management

Bank Performance

Thrift Operations

Finance Company Operations

Mutual Fund Operations

Securities Operations

Insurance and Pension Fund Operations

Pension Fund Operations

Filters

Exam 12: Market Microstructure and Strategies

With a ____ order, the investor specifies a purchase price that is above the current market price.

Trading halts are imposed by

The bid-ask spread is negatively related to

Which of the following statements is incorrect with respect to the structure of the SEC?

The ____ the trading volume of a stock, the ____ the spread.

Under the SEC's uptick rule, speculators are prohibited from taking a short position in stocks that have experienced a decline of at least 10 percent for the day, unless the most recent trade resulted in a decrease in the stock price.

____ may facilitate stock transactions by taking positions in specific stocks.

____ are enforced to restrict the amount of credit extended to customers by stockbrokers.

____ may execute transactions on a stock exchange for their clients.

Role of Financial Markets and Institutions

Determination of Interest Rates

Structure of Interest Rates

Functions of the Fed

Monetary Policy

Money Markets

Bond Markets

Bond Valuation and Risk

Mortgage Markets

Stock Offerings and Investor Monitoring

Stock Valuation and Risk

Financial Futures Markets

Options Markets

Swap Markets

Foreign Exchange Derivative Markets

Commercial Bank Operations

Bank Regulation

Bank Management

Bank Performance

Thrift Operations

Finance Company Operations

Mutual Fund Operations

Securities Operations

Insurance and Pension Fund Operations

Pension Fund Operations

Filters

The the trading volume of a stock, the the spread.