Question 1

The profit a dealer makes on a purchase and resale of shares of stock is called the:

Accepted Answer

A) margin. 
B) bid. 
C) float. 
D) offer. 
E) spread. 
A) margin. 
B) bid. 
C) float. 
D) offer. 
E) spread.

Question 2

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

Accepted Answer

A) Managers typically receive 20% 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% 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 3

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.

Question 4

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

Accepted Answer

A) 3.72 percent 
B) 5.09 percent 
C) 6.61 percent 
D) 8.75 percent 
E) 10.07 percent 
A) 3.72 percent 
B) 5.09 percent 
C) 6.61 percent 
D) 8.75 percent 
E) 10.07 percent

Question 5

Stocks which are listed on the NYSE can:

Accepted Answer

A) not be listed on any other exchange. 
B) only be dual listed on a regional exchange. 
C) only be dual listed on Instinet. 
D) only be dual listed on the Archipelago Exchange. 
E) also be listed on NASDAQ. 
A) not be listed on any other exchange. 
B) only be dual listed on a regional exchange. 
C) only be dual listed on Instinet. 
D) only be dual listed on the Archipelago Exchange. 
E) also be listed on NASDAQ.

Question 6

Which one of the following statements concerning NASDAQ is correct?

Accepted Answer

A) The NASDAQ Capital Market has the most stringent listing requirements of any of the NASDAQ companies. 
B) NASDAQ is actually comprised of four separate markets. 
C) Microsoft shares are listed on the NASDAQ Global Market. 
D) NASDAQ has more total dollar volume of trading than does the NYSE. 
E) There are more companies listed on NASDAQ than on NYSE. 
A) The NASDAQ Capital Market has the most stringent listing requirements of any of the NASDAQ companies. 
B) NASDAQ is actually comprised of four separate markets. 
C) Microsoft shares are listed on the NASDAQ Global Market. 
D) NASDAQ has more total dollar volume of trading than does the NYSE. 
E) There are more companies listed on NASDAQ than on NYSE.

Question 7

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 8

A best efforts IPO underwriting consisted of 2.2 million shares at an offer price of $17 a share.The underwriter's fee was set at 6.65 percent.How many shares were sold if the issuer received $31,926,260.10?

Accepted Answer

A) 2,011,800 shares 
B) 1,878,015 shares 
C) 1,760,915 shares 
D) 2,346,300 shares 
E) 2,053,700 shares 
A) 2,011,800 shares 
B) 1,878,015 shares 
C) 1,760,915 shares 
D) 2,346,300 shares 
E) 2,053,700 shares

Question 9

Alco Metals just sold 2.5 million shares through an IPO offering.The shares were offered at $25.50 a share and all shares were sold.The firm received a total of $67,250,000 for this issue.What was the spread?

Accepted Answer

A) 5.49 percent 
B) 6.25 percent 
C) 6.40 percent 
D) 7.00 percent 
E) 7.20 percent 
A) 5.49 percent 
B) 6.25 percent 
C) 6.40 percent 
D) 7.00 percent 
E) 7.20 percent

Question 10

A preliminary document provided to investors who are interested in a stock offering is called a(n):

Accepted Answer

A) prospectus. 
B) inquiry form. 
C) draft offer. 
D) green shoe. 
E) red herring. 
A) prospectus. 
B) inquiry form. 
C) draft offer. 
D) green shoe. 
E) red herring.

Question 11

Cee The Moon is offering 700 shares in a Dutch auction IPO.The following bids have been received:   How much will Cee The Moon receive from this offering if the underwriter's fee is 5.5 percent?

Accepted Answer

A) $9,905.75 
B) $9,440.60 
C) $10,184.25 
D) $11,245.50 
E) $12,095.30 
A) $9,905.75 
B) $9,440.60 
C) $10,184.25 
D) $11,245.50 
E) $12,095.30

Question 12

High Color Detergent is issuing new shares of stock which will trade on NASDAQ.If Sue 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

Which one of the following prices will an individual investor receive if he or she sells shares of Microsoft?

Accepted Answer

A) bid 
B) ask 
C) issue 
D) offer 
E) Dutch 
A) bid 
B) ask 
C) issue 
D) offer 
E) Dutch

Question 14

Marco Painting Supplies is a publicly-traded firm with 250,000 shares of stock outstanding.If the firm issues an additional 10,000 shares,those shares will be referred to as a(n):

Accepted Answer

A) supplemental offering. 
B) seasoned equity offering. 
C) initial public offer. 
D) market expansion offer. 
E) after-market underwriting. 
A) supplemental offering. 
B) seasoned equity offering. 
C) initial public offer. 
D) market expansion offer. 
E) after-market underwriting.

Question 15

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) 9.43 percent 
B) 9.67 percent 
C) 10.53 percent 
D) 10.91 percent 
E) 11.03 percent 
A) 9.43 percent 
B) 9.67 percent 
C) 10.53 percent 
D) 10.91 percent 
E) 11.03 percent

Question 16

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 17

The DJIA is an index of the stock prices of _____ firms.

Accepted Answer

A) 25 
B) 30 
C) 50 
D) 100 
E) 500 
A) 25 
B) 30 
C) 50 
D) 100 
E) 500

Question 18

Wilson just placed an order with his broker to purchase 500 of the outstanding shares of GE.This purchase will occur in which one of the following markets?

Accepted Answer

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

Question 19

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 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.

The profit a dealer makes on a purchase and resale of shares of stock is called the:

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

Stock market indexes:

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

Stocks which are listed on the NYSE can:

Which one of the following statements concerning NASDAQ is correct?

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

A best efforts IPO underwriting consisted of 2.2 million shares at an offer price of $17 a share.The underwriter's fee was set at 6.65 percent.How many shares were sold if the issuer received $31,926,260.10?

Alco Metals just sold 2.5 million shares through an IPO offering.The shares were offered at $25.50 a share and all shares were sold.The firm received a total of $67,250,000 for this issue.What was the spread?

A preliminary document provided to investors who are interested in a stock offering is called a(n):

Cee The Moon is offering 700 shares in a Dutch auction IPO.The following bids have been received: How much will Cee The Moon receive from this offering if the underwriter's fee is 5.5 percent?

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

Which one of the following prices will an individual investor receive if he or she sells shares of Microsoft?

Marco Painting Supplies is a publicly-traded firm with 250,000 shares of stock outstanding.If the firm issues an additional 10,000 shares,those shares will be referred to as a(n):

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

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

The DJIA is an index of the stock prices of _____ firms.

Wilson just placed an order with his broker to purchase 500 of the outstanding shares of GE.This purchase will occur in which one of the following markets?

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

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

The profit a dealer makes on a purchase and resale of shares of stock is called the:

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

Stock market indexes:

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

Stocks which are listed on the NYSE can:

Which one of the following statements concerning NASDAQ is correct?

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

A best efforts IPO underwriting consisted of 2.2 million shares at an offer price of $17 a share.The underwriter's fee was set at 6.65 percent.How many shares were sold if the issuer received $31,926,260.10?

Alco Metals just sold 2.5 million shares through an IPO offering.The shares were offered at $25.50 a share and all shares were sold.The firm received a total of $67,250,000 for this issue.What was the spread?

A preliminary document provided to investors who are interested in a stock offering is called a(n):

Cee The Moon is offering 700 shares in a Dutch auction IPO.The following bids have been received: How much will Cee The Moon receive from this offering if the underwriter's fee is 5.5 percent?

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

Which one of the following prices will an individual investor receive if he or she sells shares of Microsoft?

Marco Painting Supplies is a publicly-traded firm with 250,000 shares of stock outstanding.If the firm issues an additional 10,000 shares,those shares will be referred to as a(n):

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

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

The DJIA is an index of the stock prices of _____ firms.

Wilson just placed an order with his broker to purchase 500 of the outstanding shares of GE.This purchase will occur in which one of the following markets?

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

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