Exam 11: Securities Markets

___________________________________ has the goal of a creating a single market for investment services across the European Union as well as creating a single set of regulations for financial services firms.

Private placement can avoid SEC registration and all SEC regulations.

If a Microsoft January 20 put option with a strike price of $20 were about to expire and the market price of the underlying Microsoft stock was $15.00,the price of the put option would have to be __________ to eliminate arbitrage opportunities.

An order for immediate purchase or sale at the best possible price is called a:

Index arbitrage refers to:

The ___________________ Exchange (ICE)serves the global markets for agricultural,credit,currency,emissions,energy and equity index markets.

The Glass-Steagall Act of 1933 ended the ability of commercial banks to act as underwriters of newly issued securities.

Over-the-counter (OTC)trades must take place:

An important function of the Securities and Exchange Commission is to pass judgment on the investment merit of a security.

Federal regulation of investment banking is administered primarily under the provisions of the ___________________.

A syndicate is:

The price for which the owner is willing to sell the security is called the:

The maintenance margin is the minimum margin to which an investment may fall before a margin call is placed.

_____________ is when a broker constantly buys and sells securities from a client's portfolio in an effort to generate commissions.Rather than making decisions that are in the client's best interest,frequent commission-generating trades may be made by brokers with selfish motives.

In a financial context,due diligence refers to the detailed study of a corporation.

Which of the following is not a basic type of member of the New York Stock Exchange?

If a Microsoft January 20 call option with a strike price of $20 was selling for $2.00 and the market price of the underlying Microsoft stock was $25.62,the price of the call option would be _______________.

All of the following are considered futures exchanges EXCEPT:

In reality,an option's value will equal its intrinsic value only at expiration.At all other times,the option's premium or price will exceed its intrinsic value.A major reason for this is/are _____________.

An underwriting agreement is a contract in which the investment banker agrees to underwrite or do its best to sell securities to investors at the highest price it can;the investment banker assumes no risk for the possibility that it may fail to issue all authorized shares .