Question 1

What is the current structure of the NYSE?

Accepted Answer

A)  general partnership 
B)  limited partnership 
C)  non-profit organization 
D)  publicly traded corporation 
E)  government agency 
A)  general partnership 
B)  limited partnership 
C)  non-profit organization 
D)  publicly traded corporation 
E)  government agency

Question 2

In order to currently trade on the floor of the NYSE,members must:

Accepted Answer

A)  be registered as a floor trader. 
B)  own a seat. 
C)  purchase a trading license. 
D)  be a specialist. 
E)  be designated as a floor broker. 
A)  be registered as a floor trader. 
B)  own a seat. 
C)  purchase a trading license. 
D)  be a specialist. 
E)  be designated as a floor broker.

Question 3

A securities dealer is a(n):

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 4

Which of the following is correct regarding the compensation paid to private equity fund managers?

Accepted Answer

A)  Managers typically receive 20 percent of fund profits but no separate management fee. 
B)  Managers typically receive a high percentage management fee but no portion of fund profits. 
C)  Management compensation is usually subject to a "clawback" provision to limit the performance fees. 
D)  "Carried interest" refers to the interest fund managers earn on performance fees. 
E)  Fees paid to fund managers do not reduce the net return of the fund. 
A)  Managers typically receive 20 percent of fund profits but no separate management fee. 
B)  Managers typically receive a high percentage management fee but no portion of fund profits. 
C)  Management compensation is usually subject to a "clawback" provision to limit the performance fees. 
D)  "Carried interest" refers to the interest fund managers earn on performance fees. 
E)  Fees paid to fund managers do not reduce the net return of the fund.

Question 5

NASDAQ dealers post which one of the following in addition to their bid and ask prices?

Accepted Answer

A)  commission rates 
B)  front-end load charges 
C)  number of shares they will commit to buy or sell 
D)  total trades for the day 
E)  trading fees 
A)  commission rates 
B)  front-end load charges 
C)  number of shares they will commit to buy or sell 
D)  total trades for the day 
E)  trading fees

Question 6

An index has a market value of $695,200 at the beginning of the period and $741,900 at the end of the period.If you want the beginning index value to be 100,what is the ending index value?

Accepted Answer

A)  104.73 
B)  105.42 
C)  105.67 
D)  105.89 
E)  106.72 
A)  104.73 
B)  105.42 
C)  105.67 
D)  105.89 
E)  106.72

Question 7

Which one of the following describes an ECN?

Accepted Answer

A)  website used by investors to trade directly with other investors 
B)  website limited to use by professional brokers and dealers 
C)  computerized trading floor 
D)  communications network used by specialists 
E)  cellular trading network 
A)  website used by investors to trade directly with other investors 
B)  website limited to use by professional brokers and dealers 
C)  computerized trading floor 
D)  communications network used by specialists 
E)  cellular trading network

Question 8

An index consists of the following securities.What is the value-weighted index return?

Accepted Answer

A)  −0.43 percent 
B)  −1.46 percent 
C)  4.43 percent 
D)  4.51 percent 
E)  4.62 percent 
A)  −0.43 percent 
B)  −1.46 percent 
C)  4.43 percent 
D)  4.51 percent 
E)  4.62 percent

Question 9

The off-exchange market in which exchange-listed securities trade is referred to as the ________ market.

Accepted Answer

A)  independent 
B)  secondary 
C)  fourth 
D)  third 
E)  primary 
A)  independent 
B)  secondary 
C)  fourth 
D)  third 
E)  primary

Question 10

Which one of the following can be assumed when the SEC approves an IPO registration?

Accepted Answer

A)  The securities offering will provide value to the shareholders. 
B)  The issuer is financially sound. 
C)  The issuer will remain solvent. 
D)  All rules have been followed to allow for full disclosure of information. 
E)  The stock price is set at a level which will allow shareholders to earn a positive rate of return. 
A)  The securities offering will provide value to the shareholders. 
B)  The issuer is financially sound. 
C)  The issuer will remain solvent. 
D)  All rules have been followed to allow for full disclosure of information. 
E)  The stock price is set at a level which will allow shareholders to earn a positive rate of return.

Question 11

The market where individual investors directly trade exchange-listed securities with other individual investors is referred to as the ________ market.

Accepted Answer

A)  home 
B)  independent 
C)  third 
D)  fourth 
E)  SuperDOT 
A)  home 
B)  independent 
C)  third 
D)  fourth 
E)  SuperDOT

Question 12

A price-weighted index consists of stocks A,B,and C which are priced at $30,$12,and $18 a share,respectively.The current index divisor is 2.40.If stock C undergoes a 1-for-3 reverse stock split,the new index divisor will be:

Accepted Answer

A)  1.92 
B)  2.11 
C)  2.20 
D)  3.08 
E)  3.12 
A)  1.92 
B)  2.11 
C)  2.20 
D)  3.08 
E)  3.12

Question 13

An order book displays the following information:   You place a market order to sell 200 shares.At what price will your order be executed?

Accepted Answer

A)  $18.13 
B)  $18.14 
C)  $18.15 
D)  $18.16 
E)  $18.17 
A)  $18.13 
B)  $18.14 
C)  $18.15 
D)  $18.16 
E)  $18.17

Question 14

An index consists of the following securities.What is the value-weighted index return?

Accepted Answer

A)  12.75 percent 
B)  15.00 percent 
C)  16.50 percent 
D)  18.75 percent 
E)  25.00 percent 
A)  12.75 percent 
B)  15.00 percent 
C)  16.50 percent 
D)  18.75 percent 
E)  25.00 percent

Question 15

Moonlight is offering 1,100 shares in a Dutch auction IPO.The following bids have been received:   How much will Moonlight receive from this offering if the underwriter's fee is 6.5 percent?

Accepted Answer

A)  $12,905.75 
B)  $13,440.60 
C)  $15,184.25 
D)  $17,484.50 
E)  $19,095.30 
A)  $12,905.75 
B)  $13,440.60 
C)  $15,184.25 
D)  $17,484.50 
E)  $19,095.30

Question 16

A private equity fund: I.is set up as a limited partnership
II)usually uses a 2/20 fee structure
III)place no constraints on manager compensation
IV)typically have a stated life of 7 to 10 years

Accepted Answer

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

Question 17

A public offering of securities which are offered first to current shareholders is called a(n):

Accepted Answer

A)  existing shareholder offer. 
B)  limited offer. 
C)  rights offer. 
D)  venture offer. 
E)  preference offer. 
A)  existing shareholder offer. 
B)  limited offer. 
C)  rights offer. 
D)  venture offer. 
E)  preference offer.

Question 18

The document that must be prepared in order to receive approval for a stock offering is called a:

Accepted Answer

A)  tombstone. 
B)  prospectus. 
C)  offering agreement. 
D)  regulatory report. 
E)  offering paper. 
A)  tombstone. 
B)  prospectus. 
C)  offering agreement. 
D)  regulatory report. 
E)  offering paper.

Question 19

An index consists of the following securities and has an index divisor of 2.0.What is the price-weighted index return?

Accepted Answer

A)  −1.69 percent 
B)  −0.78 percent 
C)  0.00 percent 
D)  0.92 percent 
E)  1.43 percent 
A)  −1.69 percent 
B)  −0.78 percent 
C)  0.00 percent 
D)  0.92 percent 
E)  1.43 percent

Question 20

An index is valued on a daily basis.However,some stocks in this particular index have not traded recently.As a result,this index suffers from index:

Accepted Answer

A)  fatigue. 
B)  devaluation. 
C)  flatness. 
D)  staleness. 
E)  weighting. 
A)  fatigue. 
B)  devaluation. 
C)  flatness. 
D)  staleness. 
E)  weighting.

What is the current structure of the NYSE?

In order to currently trade on the floor of the NYSE,members must:

A securities dealer is a(n):

Which of the following is correct regarding the compensation paid to private equity fund managers?

NASDAQ dealers post which one of the following in addition to their bid and ask prices?

An index has a market value of $695,200 at the beginning of the period and $741,900 at the end of the period.If you want the beginning index value to be 100,what is the ending index value?

Which one of the following describes an ECN?

An index consists of the following securities.What is the value-weighted index return?

The off-exchange market in which exchange-listed securities trade is referred to as the ________ market.

Which one of the following can be assumed when the SEC approves an IPO registration?

The market where individual investors directly trade exchange-listed securities with other individual investors is referred to as the ________ market.

A price-weighted index consists of stocks A,B,and C which are priced at $30,$12,and $18 a share,respectively.The current index divisor is 2.40.If stock C undergoes a 1-for-3 reverse stock split,the new index divisor will be:

An order book displays the following information: You place a market order to sell 200 shares.At what price will your order be executed?

An index consists of the following securities.What is the value-weighted index return?

Moonlight is offering 1,100 shares in a Dutch auction IPO.The following bids have been received: How much will Moonlight receive from this offering if the underwriter's fee is 6.5 percent?

A private equity fund: I.is set up as a limited partnership II)usually uses a 2/20 fee structure III)place no constraints on manager compensation IV)typically have a stated life of 7 to 10 years

A public offering of securities which are offered first to current shareholders is called a(n):

The document that must be prepared in order to receive approval for a stock offering is called a:

An index consists of the following securities and has an index divisor of 2.0.What is the price-weighted index return?

An index is valued on a daily basis.However,some stocks in this particular index have not traded recently.As a result,this index suffers from index:

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

What is the current structure of the NYSE?

In order to currently trade on the floor of the NYSE,members must:

A securities dealer is a(n):

Which of the following is correct regarding the compensation paid to private equity fund managers?

NASDAQ dealers post which one of the following in addition to their bid and ask prices?

An index has a market value of $695,200 at the beginning of the period and $741,900 at the end of the period.If you want the beginning index value to be 100,what is the ending index value?

Which one of the following describes an ECN?

An index consists of the following securities.What is the value-weighted index return?

The off-exchange market in which exchange-listed securities trade is referred to as the ________ market.

Which one of the following can be assumed when the SEC approves an IPO registration?

The market where individual investors directly trade exchange-listed securities with other individual investors is referred to as the ________ market.

A price-weighted index consists of stocks A,B,and C which are priced at $30,$12,and $18 a share,respectively.The current index divisor is 2.40.If stock C undergoes a 1-for-3 reverse stock split,the new index divisor will be:

An order book displays the following information: You place a market order to sell 200 shares.At what price will your order be executed?

An index consists of the following securities.What is the value-weighted index return?

Moonlight is offering 1,100 shares in a Dutch auction IPO.The following bids have been received: How much will Moonlight receive from this offering if the underwriter's fee is 6.5 percent?

A private equity fund: I.is set up as a limited partnership II)usually uses a 2/20 fee structure III)place no constraints on manager compensation IV)typically have a stated life of 7 to 10 years

A public offering of securities which are offered first to current shareholders is called a(n):

The document that must be prepared in order to receive approval for a stock offering is called a:

An index consists of the following securities and has an index divisor of 2.0.What is the price-weighted index return?

An index is valued on a daily basis.However,some stocks in this particular index have not traded recently.As a result,this index suffers from index:

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