Question 1

Stock market indexes:

Accepted Answer

A)  are all computed using the same methodology. 
B)  all react the same to a change in the price of a particular stock. 
C)  all cover the same market sectors. 
D)  are all price-weighted. 
E)  vary in the type of stocks included. 
A)  are all computed using the same methodology. 
B)  all react the same to a change in the price of a particular stock. 
C)  all cover the same market sectors. 
D)  are all price-weighted. 
E)  vary in the type of stocks included. E

Question 2

You want to sell shares of stock at the current price.Which type of order should you place?

Accepted Answer

A)  limit 
B)  post 
C)  market 
D)  short 
E)  stop 
A)  limit 
B)  post 
C)  market 
D)  short 
E)  stop C

Question 3

Yesterday,the DJIA closed at 12,309.16.The divisor is 0.123017848.Today,every one of the stocks in the index increased in value by $0.40 a share.What is the value of today's closing DJIA?

Accepted Answer

A)  12,367 
B)  12,407 
C)  12,442 
D)  12,564 
E)  12,571 
A)  12,367 
B)  12,407 
C)  12,442 
D)  12,564 
E)  12,571 B

Question 4

Which one of the following best describes a broker?

Accepted Answer

A)  intermediary who arranges trades between a buyer and a seller 
B)  trader who buys and sells from his or her inventory 
C)  firm which charges a commission for arranging a transaction 
D)  person who buys securities for his or her own account on an exchange floor 
E)  trader who transacts business on behalf of a securities issuer 
A)  intermediary who arranges trades between a buyer and a seller 
B)  trader who buys and sells from his or her inventory 
C)  firm which charges a commission for arranging a transaction 
D)  person who buys securities for his or her own account on an exchange floor 
E)  trader who transacts business on behalf of a securities issuer

Question 5

In a recent IPO,the Sausage Co.offered 1.4 million shares of stock at an offer price of $16 a share.The underwriting was conducted on a best efforts basis with a spread of 7.0 percent.The Sausage Co.received a total of $20,079,868.00 in sale proceeds.How many shares were sold?

Accepted Answer

A)  1,349,453 shares 
B)  1,486,500 shares 
C)  1,498,200 shares 
D)  1,505,700 shares 
E)  1,508,400 shares 
A)  1,349,453 shares 
B)  1,486,500 shares 
C)  1,498,200 shares 
D)  1,505,700 shares 
E)  1,508,400 shares

Question 6

Juno Markets is offering 900 shares in a Dutch auction IPO.The following bids have been received:   How much will Bidder B have to spend to purchase all of the shares that have been allocated to him?

Accepted Answer

A)  $4,050.00 
B)  $4,212.00 
C)  $4,800.00 
D)  $5,200.00 
E)  $5,700.00 
A)  $4,050.00 
B)  $4,212.00 
C)  $4,800.00 
D)  $5,200.00 
E)  $5,700.00

Question 7

The difference between the price an underwriter pays an issuer and the underwriter's offering price is called the:

Accepted Answer

A)  spread. 
B)  margin. 
C)  offer differential. 
D)  firm commitment. 
E)  underwriting capital. 
A)  spread. 
B)  margin. 
C)  offer differential. 
D)  firm commitment. 
E)  underwriting capital.

Question 8

An index consists of the following securities and has an index divisor of 3.0.What is the price-weighted index return?

Accepted Answer

A)  -4.76 percent 
B)  -2.05 percent 
C)  3.09 percent 
D)  5.17 percent 
E)  7.48 percent 
A)  -4.76 percent 
B)  -2.05 percent 
C)  3.09 percent 
D)  5.17 percent 
E)  7.48 percent

Question 9

The SuperDOT system has lessened the role of which one of the following?

Accepted Answer

A)  personal financial advisers 
B)  floor traders 
C)  specialists 
D)  floor brokers 
E)  underwriters 
A)  personal financial advisers 
B)  floor traders 
C)  specialists 
D)  floor brokers 
E)  underwriters

Question 10

The orders displayed on NASDAQ are placed by:

Accepted Answer

A)  individuals on ECNs only. 
B)  market makers only. 
C)  both market makers and individuals on ECNs. 
D)  brokerage firms. 
E)  floor brokers. 
A)  individuals on ECNs only. 
B)  market makers only. 
C)  both market makers and individuals on ECNs. 
D)  brokerage firms. 
E)  floor brokers.

Question 11

You have the following information:   You want the beginning price-weighted index of these two stocks to be 500.Given this,what is the ending index value?

Accepted Answer

A)  408.33 
B)  487.08 
C)  511.19 
D)  576.09 
E)  612.24 
A)  408.33 
B)  487.08 
C)  511.19 
D)  576.09 
E)  612.24

Question 12

Bright Detergent is issuing new shares of stock which will trade on NASDAQ.If Sally purchases 300 of these shares,the trade will occur in which one of the following markets?

Accepted Answer

A)  primary 
B)  secondary 
C)  third 
D)  fourth 
E)  over-the-counter 
A)  primary 
B)  secondary 
C)  third 
D)  fourth 
E)  over-the-counter

Question 13

Alcorn Metals just sold 1.5 million shares through an IPO offering.The shares were offered at $31.50 a share and all shares were sold.The firm received a total of $50,200,000 for this issue.What was the spread?

Accepted Answer

A)  5.49 percent 
B)  6.24 percent 
C)  6.40 percent 
D)  7.00 percent 
E)  7.12 percent 
A)  5.49 percent 
B)  6.24 percent 
C)  6.40 percent 
D)  7.00 percent 
E)  7.12 percent

Question 14

The NYSE's Super Display Book is an electronic system which:

Accepted Answer

A)  maintains the historical records of each customer's trading activity. 
B)  transmits the latest market information to the news media. 
C)  allows floor traders to execute trades via cell phones. 
D)  tracks the activity on an exchange floor to ensure regulatory compliance. 
E)  is based on NYSE's ARCA electronic trading engine. 
A)  maintains the historical records of each customer's trading activity. 
B)  transmits the latest market information to the news media. 
C)  allows floor traders to execute trades via cell phones. 
D)  tracks the activity on an exchange floor to ensure regulatory compliance. 
E)  is based on NYSE's ARCA electronic trading engine.

Question 15

Which of the following types of indexes is a stock market index in which stocks are held in proportion to their share price?

Accepted Answer

A)  balanced 
B)  market-weighted 
C)  dollar-weighted 
D)  price-weighted 
E)  value-weighted 
A)  balanced 
B)  market-weighted 
C)  dollar-weighted 
D)  price-weighted 
E)  value-weighted

Question 16

Hi-Tek Shoes is a private firm that has decided to issue shares of stock to the general public.This stock issue will be referred to as a(n):

Accepted Answer

A)  open-end sale. 
B)  break-out issue. 
C)  public service offering. 
D)  initial public offering. 
E)  initial trial issue. 
A)  open-end sale. 
B)  break-out issue. 
C)  public service offering. 
D)  initial public offering. 
E)  initial trial issue.

Question 17

NASDAQ has which of the following characteristics?
I.trading floor
II.computer network
III.specialist system
IV.multiple market makers

Accepted Answer

A)  I and IV only 
B)  II and IV only 
C)  I, III, and IV only 
D)  II, III, and IV only 
E)  I, II, III, and IV 
A)  I and IV only 
B)  II and IV only 
C)  I, III, and IV only 
D)  II, III, and IV only 
E)  I, II, III, and IV

Question 18

The location on an exchange floor where a particular security trades is called a(n):

Accepted Answer

A)  specialist's post. 
B)  broker's terminal. 
C)  floor spot. 
D)  exchange spot. 
E)  market pit. 
A)  specialist's post. 
B)  broker's terminal. 
C)  floor spot. 
D)  exchange spot. 
E)  market pit.

Question 19

Which one of the following statements concerning venture capital is correct?

Accepted Answer

A)  Venture capital is frequently provided in stages with each stage financed by a different venture capitalist. 
B)  Most venture capitalists are passive investors. 
C)  The founders of a firm generally realize substantial payoffs as soon as the firm receives venture financing. 
D)  Venture capitalists generally compete with banks to find projects to finance. 
E)  Well established firms tend to absorb most of the available venture capital. 
A)  Venture capital is frequently provided in stages with each stage financed by a different venture capitalist. 
B)  Most venture capitalists are passive investors. 
C)  The founders of a firm generally realize substantial payoffs as soon as the firm receives venture financing. 
D)  Venture capitalists generally compete with banks to find projects to finance. 
E)  Well established firms tend to absorb most of the available venture capital.

Question 20

The party who serves as a dealer for a few securities on an exchange floor and is obligated to maintain an orderly market for those securities is called a:

Accepted Answer

A)  floor trader. 
B)  designated market maker. 
C)  floor broker. 
D)  member. 
E)  house broker. 
A)  floor trader. 
B)  designated market maker. 
C)  floor broker. 
D)  member. 
E)  house broker.

Stock market indexes:

You want to sell shares of stock at the current price.Which type of order should you place?

Yesterday,the DJIA closed at 12,309.16.The divisor is 0.123017848.Today,every one of the stocks in the index increased in value by $0.40 a share.What is the value of today's closing DJIA?

Which one of the following best describes a broker?

In a recent IPO,the Sausage Co.offered 1.4 million shares of stock at an offer price of $16 a share.The underwriting was conducted on a best efforts basis with a spread of 7.0 percent.The Sausage Co.received a total of $20,079,868.00 in sale proceeds.How many shares were sold?

Juno Markets is offering 900 shares in a Dutch auction IPO.The following bids have been received: How much will Bidder B have to spend to purchase all of the shares that have been allocated to him?

The difference between the price an underwriter pays an issuer and the underwriter's offering price is called the:

An index consists of the following securities and has an index divisor of 3.0.What is the price-weighted index return?

The SuperDOT system has lessened the role of which one of the following?

The orders displayed on NASDAQ are placed by:

You have the following information: You want the beginning price-weighted index of these two stocks to be 500.Given this,what is the ending index value?

Bright Detergent is issuing new shares of stock which will trade on NASDAQ.If Sally purchases 300 of these shares,the trade will occur in which one of the following markets?

Alcorn Metals just sold 1.5 million shares through an IPO offering.The shares were offered at $31.50 a share and all shares were sold.The firm received a total of $50,200,000 for this issue.What was the spread?

The NYSE's Super Display Book is an electronic system which:

Which of the following types of indexes is a stock market index in which stocks are held in proportion to their share price?

Hi-Tek Shoes is a private firm that has decided to issue shares of stock to the general public.This stock issue will be referred to as a(n):

NASDAQ has which of the following characteristics? I.trading floor II.computer network III.specialist system IV.multiple market makers

The location on an exchange floor where a particular security trades is called a(n):

Which one of the following statements concerning venture capital is correct?

The party who serves as a dealer for a few securities on an exchange floor and is obligated to maintain an orderly market for those securities is called a:

A Brief History of Risk and Return

The Investment Process

Overview of Security Types

Mutual Funds and Other Investment Companies

Common Stock Valuation

Stock Price Behavior and Market Efficiency

Behavioral Finance and the Psychology of Investing

Interest Rates

Bond Prices and Yields

Diversification and Risky Asset Allocation

Return,Risk,and the Security Market Line

Performance Evaluation and Risk Management

Futures Contracts

Stock Options

Option Valuation

Projecting Cash Flow and Earnings

Corporate and Government Bonds

Global Economic Activity and Industry Analysis

Mortgage-Backed Securities

Filters

Exam 5: The Stock Market

Stock market indexes:

You want to sell shares of stock at the current price.Which type of order should you place?

Yesterday,the DJIA closed at 12,309.16.The divisor is 0.123017848.Today,every one of the stocks in the index increased in value by $0.40 a share.What is the value of today's closing DJIA?

Which one of the following best describes a broker?

In a recent IPO,the Sausage Co.offered 1.4 million shares of stock at an offer price of $16 a share.The underwriting was conducted on a best efforts basis with a spread of 7.0 percent.The Sausage Co.received a total of $20,079,868.00 in sale proceeds.How many shares were sold?

Juno Markets is offering 900 shares in a Dutch auction IPO.The following bids have been received: How much will Bidder B have to spend to purchase all of the shares that have been allocated to him?

The difference between the price an underwriter pays an issuer and the underwriter's offering price is called the:

An index consists of the following securities and has an index divisor of 3.0.What is the price-weighted index return?

The SuperDOT system has lessened the role of which one of the following?

The orders displayed on NASDAQ are placed by:

You have the following information: You want the beginning price-weighted index of these two stocks to be 500.Given this,what is the ending index value?

Bright Detergent is issuing new shares of stock which will trade on NASDAQ.If Sally purchases 300 of these shares,the trade will occur in which one of the following markets?

Alcorn Metals just sold 1.5 million shares through an IPO offering.The shares were offered at $31.50 a share and all shares were sold.The firm received a total of $50,200,000 for this issue.What was the spread?

The NYSE's Super Display Book is an electronic system which:

Which of the following types of indexes is a stock market index in which stocks are held in proportion to their share price?

Hi-Tek Shoes is a private firm that has decided to issue shares of stock to the general public.This stock issue will be referred to as a(n):

NASDAQ has which of the following characteristics? I.trading floor II.computer network III.specialist system IV.multiple market makers

The location on an exchange floor where a particular security trades is called a(n):

Which one of the following statements concerning venture capital is correct?

The party who serves as a dealer for a few securities on an exchange floor and is obligated to maintain an orderly market for those securities is called a:

A Brief History of Risk and Return

The Investment Process

Overview of Security Types

Mutual Funds and Other Investment Companies

Common Stock Valuation

Stock Price Behavior and Market Efficiency

Behavioral Finance and the Psychology of Investing

Interest Rates

Bond Prices and Yields

Diversification and Risky Asset Allocation

Return,Risk,and the Security Market Line

Performance Evaluation and Risk Management

Futures Contracts

Stock Options

Option Valuation

Projecting Cash Flow and Earnings

Corporate and Government Bonds

Global Economic Activity and Industry Analysis

Mortgage-Backed Securities

Filters