Question 1

Which of the following orders is most useful to short sellers who want to limit their potential losses

Accepted Answer

A) Limit order 
B) Discretionary order 
C) Limit-loss order 
D) Stop-buy order 
A) Limit order 
B) Discretionary order 
C) Limit-loss order 
D) Stop-buy order

Question 2

Which of the following orders instructs the broker to buy at or above a specified price

Accepted Answer

A) Limit-buy order 
B) Discretionary order 
C) Limit-sell order 
D) Stop-buy order 
E) Market order 
A) Limit-buy order 
B) Discretionary order 
C) Limit-sell order 
D) Stop-buy order 
E) Market order

Question 3

You purchased JNJ stock at $50 per share.The stock is currently selling at $65.Your gains may be protected by placing a

Accepted Answer

A) stop-buy order. 
B) limit-buy order. 
C) market order. 
D) limit-sell order. 
E) None of the options 
A) stop-buy order. 
B) limit-buy order. 
C) market order. 
D) limit-sell order. 
E) None of the options

Question 4

NASDAQ subscriber levels

Accepted Answer

A) permit those with the highest level, 3, to "make a market" in the security. 
B) permit those with a level 2 subscription to receive all bid and ask quotes, but not to enter their own quotes. 
C) permit level 1 subscribers to receive general information about prices. 
D) include all OTC stocks. 
E) permit those with the highest level, 3, to "make a market" in the security; permit those with a level 2 subscription to receive all bid and ask quotes, but not to enter their own quotes; and permit level 1 subscribers to receive general information about prices. 
A) permit those with the highest level, 3, to "make a market" in the security. 
B) permit those with a level 2 subscription to receive all bid and ask quotes, but not to enter their own quotes. 
C) permit level 1 subscribers to receive general information about prices. 
D) include all OTC stocks. 
E) permit those with the highest level, 3, to "make a market" in the security; permit those with a level 2 subscription to receive all bid and ask quotes, but not to enter their own quotes; and permit level 1 subscribers to receive general information about prices.

Question 5

Firms raise capital by issuing stock

Accepted Answer

A) in the secondary market. 
B) in the primary market. 
C) to unwary investors. 
D) only on days when the market is up. 
A) in the secondary market. 
B) in the primary market. 
C) to unwary investors. 
D) only on days when the market is up.

Question 6

You sold short 300 shares of common stock at $55 per share.The initial margin is 60%.At what stock price would you receive a margin call if the maintenance margin is 35%

Accepted Answer

A) $51.00 
B) $65.18 
C) $35.22 
D) $40.36 
A) $51.00 
B) $65.18 
C) $35.22 
D) $40.36

Question 7

Assume you sell short 1,000 shares of common stock at $35 per share, with initial margin at 50%.What would be your rate of return if you repurchase the stock at $25 per share The stock paid no dividends during the period, and you did not remove any money from the account before making the offsetting transaction.

Accepted Answer

A) 20.47% 
B) 25.63% 
C) 57.14% 
D) 77.23% 
A) 20.47% 
B) 25.63% 
C) 57.14% 
D) 77.23%

Question 8

Assume you sell short 100 shares of common stock at $30 per share, with initial margin at 50%.What would be your rate of return if you repurchase the stock at $35 per share The stock paid no dividends during the period, and you did not remove any money from the account before making the offsetting transaction.

Accepted Answer

A) -33.33% 
B) -25.63% 
C) -57.14% 
D) -77.23% 
A) -33.33% 
B) -25.63% 
C) -57.14% 
D) -77.23%

Question 9

When stocks are held in street name

Accepted Answer

A) the investor receives a stock certificate with the owner's street address. 
B) the investor receives a stock certificate without the owner's street address. 
C) the investor does not receive a stock certificate. 
D) the broker holds the stock in the brokerage firm's name on behalf of the client. 
E) the investor does not receive a stock certificate and the broker holds the stock in the brokerage firm's name on behalf of the client. 
A) the investor receives a stock certificate with the owner's street address. 
B) the investor receives a stock certificate without the owner's street address. 
C) the investor does not receive a stock certificate. 
D) the broker holds the stock in the brokerage firm's name on behalf of the client. 
E) the investor does not receive a stock certificate and the broker holds the stock in the brokerage firm's name on behalf of the client.

Which of the following orders is most useful to short sellers who want to limit their potential losses

Which of the following orders instructs the broker to buy at or above a specified price

You purchased JNJ stock at $50 per share.The stock is currently selling at $65.Your gains may be protected by placing a

NASDAQ subscriber levels

Firms raise capital by issuing stock

You sold short 300 shares of common stock at $55 per share.The initial margin is 60%.At what stock price would you receive a margin call if the maintenance margin is 35%

When stocks are held in street name

The Investment Environment

Asset Classes and Financial Instruments

Mutual Funds and Other Investment Companies

Risk, Return, and the Historical Record

Capital Allocation to Risky Assets

Optimal Risky Portfolios

Index Models

The Capital Asset Pricing Model

Arbitrage Pricing Theory and Multifactor Models of Risk and Return

The Efficient Market Hypothesis

Behavioral Finance and Technical Analysis

Empirical Evidence on Security Returns

Bond Prices and Yields

The Term Structure of Interest Rates

Managing Bond Portfolios

Macroeconomic and Industry Analysis

Equity Valuation Models

Financial Statement Analysis

Options Markets: Introduction

Option Valuation

Futures Markets

Futures, Swaps, and Risk Management

Portfolio Performance Evaluation

International Diversification

Hedge Funds

The Theory of Active Portfolio Management

Investment Policy and the Framework of the Cfa Institute

Filters

Exam 3: How Securities Are Traded

Which of the following orders is most useful to short sellers who want to limit their potential losses

Which of the following orders instructs the broker to buy at or above a specified price

You purchased JNJ stock at $50 per share.The stock is currently selling at $65.Your gains may be protected by placing a

NASDAQ subscriber levels

Firms raise capital by issuing stock

You sold short 300 shares of common stock at $55 per share.The initial margin is 60%.At what stock price would you receive a margin call if the maintenance margin is 35%

When stocks are held in street name

The Investment Environment

Asset Classes and Financial Instruments

Mutual Funds and Other Investment Companies

Risk, Return, and the Historical Record

Capital Allocation to Risky Assets

Optimal Risky Portfolios

Index Models

The Capital Asset Pricing Model

Arbitrage Pricing Theory and Multifactor Models of Risk and Return

The Efficient Market Hypothesis

Behavioral Finance and Technical Analysis

Empirical Evidence on Security Returns

Bond Prices and Yields

The Term Structure of Interest Rates

Managing Bond Portfolios

Macroeconomic and Industry Analysis

Equity Valuation Models

Financial Statement Analysis

Options Markets: Introduction

Option Valuation

Futures Markets

Futures, Swaps, and Risk Management

Portfolio Performance Evaluation

International Diversification

Hedge Funds

The Theory of Active Portfolio Management

Investment Policy and the Framework of the Cfa Institute

Filters