Exam 3: How Securities Are Traded

Assume you sold short 100 shares of common stock at $70 per share.The initial margin is 50%.What would be the maintenance margin if a margin call is made at a stock price of $85

Which of the following is not required under the CFA Institute Standards of Professional Conduct

You purchased 300 shares of common stock on margin for $60 per share.The initial margin is 60% and the stock pays no dividend.What would your rate of return be if you sell the stock at $45 per share Ignore interest on margin.

You purchased 1,000 shares of common stock on margin at $30 per share.Assume the initial margin is 50% and the stock pays no dividend.What would the maintenance margin be if a margin call is made at a stock price of $24 Ignore interest on margin.

In a "firm commitment," the investment banker

Which of the following statements regarding the specialist are true

You sold short 100 shares of common stock at $45 per share.The initial margin is 50%.Your initial investment was

Block transactions are transactions for more than _______ shares and they account for about _____ percent of all trading on the NYSE.

List three factors that are listing requirements for the New York Stock Exchange.Why does the exchange have such requirements

You purchased 100 shares of IBM common stock on margin at $70 per share.Assume the initial margin is 50% and the maintenance margin is 30%.Below what stock price level would you get a margin call Assume the stock pays no dividend; ignore interest on margin.

The cost of buying and selling a stock consists of

Initial margin requirements are determined by

You purchased 100 shares of common stock on margin for $35 per share.The initial margin is 50% and the stock pays no dividend.What would your rate of return be if you sell the stock at $42 per share Ignore interest on margin.

You sell short 100 shares of Loser Co.at a market price of $45 per share.Your maximum possible loss is

Which one of the following statements regarding orders is false

You sold short 100 shares of common stock at $45 per share.The initial margin is 50%.At what stock price would you receive a margin call if the maintenance margin is 35%

You purchased 100 shares of XON common stock on margin at $60 per share.Assume the initial margin is 50% and the maintenance margin is 30%.Below what stock price level would you get a margin call Assume the stock pays no dividend; ignore interest on margin.

One outcome from the SEC investigation of the "Flash Crash of 2010" was

Discuss margin buying of common stocks.Include in your discussion the advantages and disadvantages, the types of margin requirements, how these requirements are met, and who determines these requirements.

Investment bankers