Exam 15: Pricing and Distribution

How often are longer-term securities auctioned?

Apple Tree Electronics is planning to offer its stock on the primary securities market. Investors are excited as Apple Tree has never sold shares of their stock before. Apple Tree is most likely having a(n)

Fortunato is excited for the coming week. He works for a large investment firm and will be taking part in his first IPO. He will be responsible for purchasing the stock and then reselling it to public investors. Fortunato most likely works as a(n)

Rashid bought a long-term IOU issued by the federal government on which he is paid interest at regular intervals. This is

A(n) ________ exchange is a security exchange in which futures contracts are bought and sold.

Lei's investment manager told her that if she wants to increase the return on the money currently in her checking account, she should invest in a bank certificate of deposit. This is

Which statement about money market instruments is true?

Martha Stewart went to jail for ________, which is the illegal use of private company information to further one's own fortunes or those of family or friends.

Kaoru wanted to retire early so he placed his free money in high-risk stocks. Unfortunately, the country entered a recession and the stock market dropped significantly. Kaoru lost most of the money he had invested. What option would have most likely insulated Kaoru from the market crash?

How often are short-term securities auctioned?

You are interested in buying stock in Technocube, a technology company. Provide an example that illustrates what you would tell your broker under each of the three conditions for securities orders.

Rocky's broker has played a huge role in helping him with his investments. The broker has helped complete research and provided advice to Rocky. In addition, he executes trades and completes all of Rocky's tax planning. Rocky's broker can be best described as a(n) ________ broker.

Roxane has been buying and selling securities on her own for more than five years. Last year she made more than $10,000 by selling securities. This money can be best described as

In working with the Millers on their investment strategy, Milton noticed that they have most of their money tied up in their house. He suggests that if they need cash quickly, they will have problems with

What is the primary securities market? Describe the role investment banking has in the primary securities market.

Stock market ________ are indexes of stock market prices of groups of stocks that are related in some way.

Aqib thinks one of the stocks he owns might be dropping, but he's not confident enough to sell it yet. He calls his broker and requests that she sell the stock if it drops more than 10 percent during the day. This can be best described as a ________ order.

Faris enjoys researching and analyzing investment options. He is always trying to uncover stocks that he perceives as undervalued. When he finds an undervalued stock, he buys it with the hope that other investors will eventually want to buy the same stocks, which will increase their price. Which investment strategy does this best represent?

Which statement about exchange-traded funds is true?

Felicia purchased some stock last year. She was disappointed at the end of the year when she realized that she would not have the opportunity to vote in the company election, but she was very pleased when she received a cash payout from the company at the end of the following quarter. Felicia most likely owns ________ stock.