Question 1

Which one of the following orders is frequently used as a means to limit losses resulting from a short sale?

Accepted Answer

A) limit 
B) market 
C) day 
D) stop-sell 
E) stop-buy 
A) limit 
B) market 
C) day 
D) stop-sell 
E) stop-buy

Question 2

A price-weighted index consists of stocks A,B,and C which are priced at $38,$21,and $26 a share,respectively.The current index divisor is 2.7.What will the new index divisor be if stock B undergoes a 3-for-1 stock split?

Accepted Answer

A) 2.1684 
B) 2.2553 
C) 2.5890 
D) 2.7000 
E) 3.1447 
A) 2.1684 
B) 2.2553 
C) 2.5890 
D) 2.7000 
E) 3.1447

Question 3

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 4

When the issuer assumes the risk for any shares the underwriters cannot sell,the underwriting is known as a _____ underwriting.

Accepted Answer

A) Dutch auction 
B) partial 
C) firm commitment 
D) best efforts 
E) pro-rata 
A) Dutch auction 
B) partial 
C) firm commitment 
D) best efforts 
E) pro-rata

Question 5

A trading floor broker:

Accepted Answer

A) is a NYSE member who trades on the floor for his or her personal account. 
B) executes orders on behalf of commission brokers in exchange for a fee. 
C) executes customers' orders in exchange for a commission. 
D) trades a limited number of securities and is obligated to maintain an orderly market for those securities. 
E) is any party who owns a NYSE trading license. 
A) is a NYSE member who trades on the floor for his or her personal account. 
B) executes orders on behalf of commission brokers in exchange for a fee. 
C) executes customers' orders in exchange for a commission. 
D) trades a limited number of securities and is obligated to maintain an orderly market for those securities. 
E) is any party who owns a NYSE trading license.

Question 6

Reliant Underwriters has agreed to a firm commitment underwriting in which they will pay $36.75 million in exchange for 3 million shares of stock for an IPO offering.The offering price is expected to be $13.50 a share.How much will the underwriters earn if all of the shares can be sold?

Accepted Answer

A) $1.25 million 
B) $2.75 million 
C) $3.75 million 
D) $4.25 million 
E) $4.50 million 
A) $1.25 million 
B) $2.75 million 
C) $3.75 million 
D) $4.25 million 
E) $4.50 million

Question 7

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 8

Which one of the following is the federal agency which regulates the financial markets in the U.S.?

Accepted Answer

A) Treasury Department 
B) National Association of Securities Dealers 
C) Over the Counter Commission 
D) Federal Reserve 
E) Securities and Exchange Commission 
A) Treasury Department 
B) National Association of Securities Dealers 
C) Over the Counter Commission 
D) Federal Reserve 
E) Securities and Exchange Commission

Question 9

Lucas wants to sell 9,000 shares of stock and places a market order.The floor broker is unable to arrange the sale with another floor broker so the specialist agrees to "stop" the stock.What has the specialist agreed to do?

Accepted Answer

A) cancel the order 
B) place the order into the order book to hold until an order to buy 9,000 shares is received 
C) purchase the shares if no other buyer is readily available 
D) sell the shares to the next available buyer regardless of the price received 
E) sell the shares at the end of the trading day at the best price available at that time 
A) cancel the order 
B) place the order into the order book to hold until an order to buy 9,000 shares is received 
C) purchase the shares if no other buyer is readily available 
D) sell the shares to the next available buyer regardless of the price received 
E) sell the shares at the end of the trading day at the best price available at that time

Question 10

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 11

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.

Question 12

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 13

Assume the DJIA closed at 15,150 last night.The divisor is 0.123017848.Assume that 29 of the stocks in the index were unchanged today.One stock increased in value from $44.80 a share yesterday to $47.90 a share today.What is the DJIA index value at the close of trading today?

Accepted Answer

A) 15,175.20 
B) 15,208.30 
C) 15,365.60 
D) 15,412.20 
E) 15,524.10 
A) 15,175.20 
B) 15,208.30 
C) 15,365.60 
D) 15,412.20 
E) 15,524.10

Question 14

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 15

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 16

Which one of the following prices will an investor pay to purchase shares of stock that are currently outstanding?

Accepted Answer

A) issue 
B) option 
C) bid 
D) ask 
E) primary 
A) issue 
B) option 
C) bid 
D) ask 
E) primary

Question 17

In 2007,NYSE Holdings merged with which one of the following?

Accepted Answer

A) NASDAQ 
B) AMEX 
C) Chicago Stock Exchange 
D) London Stock Exchange 
E) Euronext, N.V. 
A) NASDAQ 
B) AMEX 
C) Chicago Stock Exchange 
D) London Stock Exchange 
E) Euronext, N.V.

Question 18

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

Question 19

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 20

Which of the following are common characteristic of the OTCBB market?
I.low stock prices
II.dual listings with NASDAQ
III.high percentage price changes
IV.thinly traded securities

Accepted Answer

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

Which one of the following orders is frequently used as a means to limit losses resulting from a short sale?

A price-weighted index consists of stocks A,B,and C which are priced at $38,$21,and $26 a share,respectively.The current index divisor is 2.7.What will the new index divisor be if stock B undergoes a 3-for-1 stock split?

The orders displayed on NASDAQ are placed by:

When the issuer assumes the risk for any shares the underwriters cannot sell,the underwriting is known as a _____ underwriting.

A trading floor broker:

Reliant Underwriters has agreed to a firm commitment underwriting in which they will pay $36.75 million in exchange for 3 million shares of stock for an IPO offering.The offering price is expected to be $13.50 a share.How much will the underwriters earn if all of the shares can be sold?

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

Which one of the following is the federal agency which regulates the financial markets in the U.S.?

Lucas wants to sell 9,000 shares of stock and places a market order.The floor broker is unable to arrange the sale with another floor broker so the specialist agrees to "stop" the stock.What has the specialist agreed to do?

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?

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:

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):

Assume the DJIA closed at 15,150 last night.The divisor is 0.123017848.Assume that 29 of the stocks in the index were unchanged today.One stock increased in value from $44.80 a share yesterday to $47.90 a share today.What is the DJIA index value at the close of trading today?

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

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

Which one of the following prices will an investor pay to purchase shares of stock that are currently outstanding?

In 2007,NYSE Holdings merged with which one of the following?

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

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?

Which of the following are common characteristic of the OTCBB market? I.low stock prices II.dual listings with NASDAQ III.high percentage price changes IV.thinly traded securities

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

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Exam 5: The Stock Market

Which one of the following orders is frequently used as a means to limit losses resulting from a short sale?

A price-weighted index consists of stocks A,B,and C which are priced at $38,$21,and $26 a share,respectively.The current index divisor is 2.7.What will the new index divisor be if stock B undergoes a 3-for-1 stock split?

The orders displayed on NASDAQ are placed by:

When the issuer assumes the risk for any shares the underwriters cannot sell,the underwriting is known as a _____ underwriting.

A trading floor broker:

Reliant Underwriters has agreed to a firm commitment underwriting in which they will pay $36.75 million in exchange for 3 million shares of stock for an IPO offering.The offering price is expected to be $13.50 a share.How much will the underwriters earn if all of the shares can be sold?

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

Which one of the following is the federal agency which regulates the financial markets in the U.S.?

Lucas wants to sell 9,000 shares of stock and places a market order.The floor broker is unable to arrange the sale with another floor broker so the specialist agrees to "stop" the stock.What has the specialist agreed to do?

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?

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:

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):

Assume the DJIA closed at 15,150 last night.The divisor is 0.123017848.Assume that 29 of the stocks in the index were unchanged today.One stock increased in value from $44.80 a share yesterday to $47.90 a share today.What is the DJIA index value at the close of trading today?

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

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

Which one of the following prices will an investor pay to purchase shares of stock that are currently outstanding?

In 2007,NYSE Holdings merged with which one of the following?

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

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?

Which of the following are common characteristic of the OTCBB market? I.low stock prices II.dual listings with NASDAQ III.high percentage price changes IV.thinly traded securities

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