Question 1

A firm that specializes in arranging financing for companies is called a(n):

Accepted Answer

A) floor broker 
B) investment banking firm 
C) investment dealer 
D) private broker 
E) marketing firm 
A) floor broker 
B) investment banking firm 
C) investment dealer 
D) private broker 
E) marketing firm

Question 2

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

Question 3

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 4

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 5

When a group of underwriters jointly work together to sell a new issue of securities,the underwriters form a(n):

Accepted Answer

A) underwriting cartel. 
B) market union. 
C) venture capital association. 
D) Dutch market. 
E) syndicate. 
A) underwriting cartel. 
B) market union. 
C) venture capital association. 
D) Dutch market. 
E) syndicate.

Question 6

The process of purchasing newly issued shares from the issuer and reselling those shares to the general public is called:

Accepted Answer

A) underwriting 
B) capitalizing 
C) securing 
D) brokering 
E) deploying 
A) underwriting 
B) capitalizing 
C) securing 
D) brokering 
E) deploying

Question 7

When an underwriting syndicate purchases an entire issue of new securities and accepts the risk of unsold shares,the underwriting is known as a _____ underwriting.

Accepted Answer

A) Dutch auction 
B) full-fledge 
C) firm commitment 
D) best efforts 
E) guaranteed sale 
A) Dutch auction 
B) full-fledge 
C) firm commitment 
D) best efforts 
E) guaranteed sale

Question 8

The financing provided for new ventures that are frequently high-risk investments is referred to as "venture _______".

Accepted Answer

A) capital 
B) leverage 
C) risk funds 
D) funding 
E) investing 
A) capital 
B) leverage 
C) risk funds 
D) funding 
E) investing

Question 9

An owner of a trading license on the NYSE is called a:

Accepted Answer

A) broker. 
B) shareholder. 
C) member. 
D) trader. 
E) dealer. 
A) broker. 
B) shareholder. 
C) member. 
D) trader. 
E) dealer.

Question 10

Steve placed a limit order to sell 500 shares of stock at $14 a share.Which of the following does Steve know for sure?
I.His order will execute but the time of execution is unknown.
II.His order may never execute.
III.He will receive exactly $7,000 if his order executes.
IV.He could receive more,but not less,than $14 a share.

Accepted Answer

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

Question 11

When the price of newly issued shares is determined by competitive bidding the underwriting is known as a _____ underwriting.

Accepted Answer

A) Dutch auction 
B) market-priced 
C) seasoned 
D) best efforts 
E) rights 
A) Dutch auction 
B) market-priced 
C) seasoned 
D) best efforts 
E) rights

Question 12

Which one of the following has the greatest duty to provide liquidity to the financial market?

Accepted Answer

A) floor broker 
B) independent broker 
C) dealer 
D) designated market maker 
E) floor trader 
A) floor broker 
B) independent broker 
C) dealer 
D) designated market maker 
E) floor trader

Question 13

A NYSE member who trades only for his or her own account is called a(n):

Accepted Answer

A) floor trader. 
B) specialist. 
C) individual broker. 
D) floor broker. 
E) house broker. 
A) floor trader. 
B) specialist. 
C) individual broker. 
D) floor broker. 
E) house broker.

Question 14

Mason Materials is offering 800 shares in a Dutch auction IPO.The following bids have been received:   How many shares will be allocated to Bidder A?

Accepted Answer

A) 0 
B) 80 
C) 125 
D) 145 
E) 200 
A) 0 
B) 80 
C) 125 
D) 145 
E) 200

Question 15

An order to buy shares of stock at a stated price or less is called a _____ order.

Accepted Answer

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

Question 16

Inside quotes are the:

Accepted Answer

A) highest asked and lowest bid quotes offered by securities dealers. 
B) highest bid and lowest asked quotes offered by securities dealers. 
C) latest prices at which corporate insiders have purchased or sold securities. 
D) bid and asked prices which are offered only to institutional traders or large private investors. 
E) latest price at which a security traded. 
A) highest asked and lowest bid quotes offered by securities dealers. 
B) highest bid and lowest asked quotes offered by securities dealers. 
C) latest prices at which corporate insiders have purchased or sold securities. 
D) bid and asked prices which are offered only to institutional traders or large private investors. 
E) latest price at which a security traded.

Question 17

The duties of a specialist include which of the following?
I.maintain an orderly market
II.offer a higher bid price than the floor brokers
III.provide liquidity to the market
IV.purchase all shares offered as limit sells

Accepted Answer

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

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

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 20

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

A firm that specializes in arranging financing for companies is called a(n):

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?

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

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

When a group of underwriters jointly work together to sell a new issue of securities,the underwriters form a(n):

The process of purchasing newly issued shares from the issuer and reselling those shares to the general public is called:

When an underwriting syndicate purchases an entire issue of new securities and accepts the risk of unsold shares,the underwriting is known as a _____ underwriting.

The financing provided for new ventures that are frequently high-risk investments is referred to as "venture _______".

An owner of a trading license on the NYSE is called a:

When the price of newly issued shares is determined by competitive bidding the underwriting is known as a _____ underwriting.

Which one of the following has the greatest duty to provide liquidity to the financial market?

A NYSE member who trades only for his or her own account is called a(n):

Mason Materials is offering 800 shares in a Dutch auction IPO.The following bids have been received: How many shares will be allocated to Bidder A?

An order to buy shares of stock at a stated price or less is called a _____ order.

Inside quotes are the:

The duties of a specialist include which of the following? I.maintain an orderly market II.offer a higher bid price than the floor brokers III.provide liquidity to the market IV.purchase all shares offered as limit sells

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

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?

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

A firm that specializes in arranging financing for companies is called a(n):

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?

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

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

When a group of underwriters jointly work together to sell a new issue of securities,the underwriters form a(n):

The process of purchasing newly issued shares from the issuer and reselling those shares to the general public is called:

When an underwriting syndicate purchases an entire issue of new securities and accepts the risk of unsold shares,the underwriting is known as a _____ underwriting.

The financing provided for new ventures that are frequently high-risk investments is referred to as "venture _______".

An owner of a trading license on the NYSE is called a:

When the price of newly issued shares is determined by competitive bidding the underwriting is known as a _____ underwriting.

Which one of the following has the greatest duty to provide liquidity to the financial market?

A NYSE member who trades only for his or her own account is called a(n):

Mason Materials is offering 800 shares in a Dutch auction IPO.The following bids have been received: How many shares will be allocated to Bidder A?

An order to buy shares of stock at a stated price or less is called a _____ order.

Inside quotes are the:

The duties of a specialist include which of the following? I.maintain an orderly market II.offer a higher bid price than the floor brokers III.provide liquidity to the market IV.purchase all shares offered as limit sells

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

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?

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