Question 1

-You place an order to buy 150 shares. At what price will your order be executed?

Accepted Answer

A)  $64.12 
B)  $64.15 
C)  $64.16 
D)  $64.10 
E)  $64.21 
A)  $64.12 
B)  $64.15 
C)  $64.16 
D)  $64.10 
E)  $64.21

Question 2

Which of the following order types would normally be executed the fastest?

Accepted Answer

A)  A market order. 
B)  A limit order. 
C)  A stop order. 
D)  A stop-limit order. 
E)  A stop-buy order. 
A)  A market order. 
B)  A limit order. 
C)  A stop order. 
D)  A stop-limit order. 
E)  A stop-buy order.

Question 3

To be listed on the Toronto Stock Exchange, a firm must have:

Accepted Answer

A)  Net tangible assets more than $2 million 
B)  Pre-tax income larger than $200,000 in most recent years 
C)  At least $4 million in market value of publicly held shares 
D)  At least 1 million shares of outstanding stock held in public hands 
E)  All of the above 
A)  Net tangible assets more than $2 million 
B)  Pre-tax income larger than $200,000 in most recent years 
C)  At least $4 million in market value of publicly held shares 
D)  At least 1 million shares of outstanding stock held in public hands 
E)  All of the above

Question 4

Which of the following best describes a "leveraged buyout".

Accepted Answer

A)  The use of borrowed funds to take a company private. 
B)  Buying a majority share in a small, relatively risky company. 
C)  The private debt-financing of company with a known history. 
D)  The purchase of "on going concerns" that is family owned and operated. 
E)  Debt financing of a start-up firm with no assets to provide as collateral. 
A)  The use of borrowed funds to take a company private. 
B)  Buying a majority share in a small, relatively risky company. 
C)  The private debt-financing of company with a known history. 
D)  The purchase of "on going concerns" that is family owned and operated. 
E)  Debt financing of a start-up firm with no assets to provide as collateral.

Question 5

The majority of all capital market transactions occur in the

Accepted Answer

A)  Primary market 
B)  Secondary market 
C)  Third market 
D)  Fourth market 
E)  Direct placement market 
A)  Primary market 
B)  Secondary market 
C)  Third market 
D)  Fourth market 
E)  Direct placement market

Question 6

-If Wayne and Shuster are the only two stocks in an index, what is the price-weighted index return?

Accepted Answer

A)  12.40% 
B)  11.65% 
C)  12.99% 
D)  10.43% 
E)  11.12% 
A)  12.40% 
B)  11.65% 
C)  12.99% 
D)  10.43% 
E)  11.12%

Question 7

The first time a firm sells shares of stock to the public is called a(n) ___________ offering.

Accepted Answer

A)  Secondary 
B)  Tertiary 
C)  Market 
D)  Initial public 
E)  Open 
A)  Secondary 
B)  Tertiary 
C)  Market 
D)  Initial public 
E)  Open

Question 8

What role does the Ontario Securities and Exchange Commission (OSC) play in an IPO?

Accepted Answer

As the largest provincial regulatory age

Question 9

Which of the following would not be a reason to adjust the divisor of a price-weighted index?

Accepted Answer

A)  A stock in the index splits. 
B)  A cash dividend is paid. 
C)  A stock is dropped from the index and a new stock added. 
D)  A stock in the index has a reverse stock split. 
E)  All of the above are reasons to adjust the divisor. 
A)  A stock in the index splits. 
B)  A cash dividend is paid. 
C)  A stock is dropped from the index and a new stock added. 
D)  A stock in the index has a reverse stock split. 
E)  All of the above are reasons to adjust the divisor.

Question 10

A ___________ commitment underwriting is an arrangement where the underwriter pays the issuer a stated amount whether or not the underwriter can sell all of the shares in the issue to investors.

Accepted Answer

A)  Standby 
B)  Fixed 
C)  Variable 
D)  Best effort 
E)  Clean sweep 
A)  Standby 
B)  Fixed 
C)  Variable 
D)  Best effort 
E)  Clean sweep

Question 11

-You place an order to short 500 shares of stock. The last trade was at $56.12. The previous trade was at $56.08. You order can be executed at:

Accepted Answer

A)  $56.12 or higher. 
B)  $56.12 or lower. 
C)  $56.08 or higher. 
D)  $56.08 or lower. 
E)  at any price. 
A)  $56.12 or higher. 
B)  $56.12 or lower. 
C)  $56.08 or higher. 
D)  $56.08 or lower. 
E)  at any price.

Question 12

How most often are shares allocated in a Dutch auction when there are more shares demanded than are available at the winning bid price?

Accepted Answer

A)  Have a random draw to determine which companies will be allowed to buy shares. 
B)  Have a random draw to determine which companies will be excluded from buying shares. 
C)  Repeat the auction starting from scratch. 
D)  Allot each company a proportion of shares relative to the number of shares available and the number of shares demanded at the winning price. 
E)  Sell shares to companies with the highest bids and split the remaining shares amongst companies with bids equal to the winning bid price 
A)  Have a random draw to determine which companies will be allowed to buy shares. 
B)  Have a random draw to determine which companies will be excluded from buying shares. 
C)  Repeat the auction starting from scratch. 
D)  Allot each company a proportion of shares relative to the number of shares available and the number of shares demanded at the winning price. 
E)  Sell shares to companies with the highest bids and split the remaining shares amongst companies with bids equal to the winning bid price

Question 13

The price a dealer is willing to pay for a security is called the ___________ price, which is also the ___________ of the two prices quoted for any security.

Accepted Answer

A)  Ask; higher 
B)  Bid; lower 
C)  Bid; higher 
D)  Ask; lower 
E)  Spread; medium 
A)  Ask; higher 
B)  Bid; lower 
C)  Bid; higher 
D)  Ask; lower 
E)  Spread; medium

Question 14

The percentage the investment banker keeps when selling a security for a company is called the underwriter ___________.

Accepted Answer

A)  Profit 
B)  Spread 
C)  Margin 
D)  Take 
E)  Markup 
A)  Profit 
B)  Spread 
C)  Margin 
D)  Take 
E)  Markup

Question 15

-If Wayne and Shuster are the only two stocks in an index, what is the equal-weighted index return?

Accepted Answer

A)  12.40% 
B)  11.65% 
C)  12.99% 
D)  10.43% 
E)  11.12% 
A)  12.40% 
B)  11.65% 
C)  12.99% 
D)  10.43% 
E)  11.12%

Question 16

Which of the following roles an investment banking firm does not perform with a best effort underwriting?

Accepted Answer

A)  Determining the issuing price of the security to be offered 
B)  Managing the selling group for new issue 
C)  Underwriting the issue 
D)  Researching market conditions 
E)  Determining the features of the security offered 
A)  Determining the issuing price of the security to be offered 
B)  Managing the selling group for new issue 
C)  Underwriting the issue 
D)  Researching market conditions 
E)  Determining the features of the security offered

Question 17

-Wayne and Shuster are the only two stocks in an index. You want the beginning index value to be 200. What is the ending index value for the value-weighted index?

Accepted Answer

A)  208.43 
B)  225.98 
C)  218.26 
D)  230.47 
E)  177.01 
A)  208.43 
B)  225.98 
C)  218.26 
D)  230.47 
E)  177.01

Question 18

You place a stop-loss order at $78. The current share price is $82. The stock price drops the next day to $75. What is the best price you could receive for your stock?

Accepted Answer

A)  $75.00 
B)  $78.00 
C)  $74.99 
D)  $82.00 
E)  $75.01 
A)  $75.00 
B)  $78.00 
C)  $74.99 
D)  $82.00 
E)  $75.01

Question 19

LOL Financial is buying 100,000 shares of stock from OMG Inc., as part of a new stock issues trading on the TSX. This sale is occurring in the ___________ market

Accepted Answer

A)  Third 
B)  Primary 
C)  Initial 
D)  Secondary 
E)  OTC 
A)  Third 
B)  Primary 
C)  Initial 
D)  Secondary 
E)  OTC

Question 20

When stocks are held in an index in proportion to their total company market value, the index is

Accepted Answer

A)  Balanced 
B)  Front-weighted 
C)  Back-weighted 
D)  Price-weighted 
E)  Value-weighted 
A)  Balanced 
B)  Front-weighted 
C)  Back-weighted 
D)  Price-weighted 
E)  Value-weighted

-You place an order to buy 150 shares. At what price will your order be executed?

Which of the following order types would normally be executed the fastest?

To be listed on the Toronto Stock Exchange, a firm must have:

Which of the following best describes a "leveraged buyout".

The majority of all capital market transactions occur in the

-If Wayne and Shuster are the only two stocks in an index, what is the price-weighted index return?

The first time a firm sells shares of stock to the public is called a(n) ___________ offering.

What role does the Ontario Securities and Exchange Commission (OSC) play in an IPO?

Which of the following would not be a reason to adjust the divisor of a price-weighted index?

A ___________ commitment underwriting is an arrangement where the underwriter pays the issuer a stated amount whether or not the underwriter can sell all of the shares in the issue to investors.

-You place an order to short 500 shares of stock. The last trade was at $56.12. The previous trade was at $56.08. You order can be executed at:

How most often are shares allocated in a Dutch auction when there are more shares demanded than are available at the winning bid price?

The price a dealer is willing to pay for a security is called the _ price, which is also the _ of the two prices quoted for any security.

The percentage the investment banker keeps when selling a security for a company is called the underwriter ___________.

-If Wayne and Shuster are the only two stocks in an index, what is the equal-weighted index return?

Which of the following roles an investment banking firm does not perform with a best effort underwriting?

-Wayne and Shuster are the only two stocks in an index. You want the beginning index value to be 200. What is the ending index value for the value-weighted index?

You place a stop-loss order at $78. The current share price is $82. The stock price drops the next day to $75. What is the best price you could receive for your stock?

LOL Financial is buying 100,000 shares of stock from OMG Inc., as part of a new stock issues trading on the TSX. This sale is occurring in the ___________ market

When stocks are held in an index in proportion to their total company market value, the index is

A Brief History of Risk and Return

Diversification and Risky Asset Allocation

The Investment Process

Overview of Security Types

Mutual Funds

Common Stock Valuation

Stock Price Behaviour and Market Efficiency

Behavioural Finance and the Psychology of Investing

Interest Rates

Bond Prices and Yields

Return, Risk and Security Management

Performance Evaluation and Risk Management

Options

Option Valuation

Futures Contracts

Projecting Cash Flow and Earnings

Corporate Bonds

Government Bonds and Mortgaged-Backed Securities

International Portfolio Investment

Filters

Exam 6: The Stock Market

-You place an order to buy 150 shares. At what price will your order be executed?

Which of the following order types would normally be executed the fastest?

To be listed on the Toronto Stock Exchange, a firm must have:

Which of the following best describes a "leveraged buyout".

The majority of all capital market transactions occur in the

-If Wayne and Shuster are the only two stocks in an index, what is the price-weighted index return?

The first time a firm sells shares of stock to the public is called a(n) ___________ offering.

What role does the Ontario Securities and Exchange Commission (OSC) play in an IPO?

Which of the following would not be a reason to adjust the divisor of a price-weighted index?

A ___________ commitment underwriting is an arrangement where the underwriter pays the issuer a stated amount whether or not the underwriter can sell all of the shares in the issue to investors.

-You place an order to short 500 shares of stock. The last trade was at $56.12. The previous trade was at $56.08. You order can be executed at:

How most often are shares allocated in a Dutch auction when there are more shares demanded than are available at the winning bid price?

The price a dealer is willing to pay for a security is called the ___________ price, which is also the ___________ of the two prices quoted for any security.

The percentage the investment banker keeps when selling a security for a company is called the underwriter ___________.

-If Wayne and Shuster are the only two stocks in an index, what is the equal-weighted index return?

Which of the following roles an investment banking firm does not perform with a best effort underwriting?

-Wayne and Shuster are the only two stocks in an index. You want the beginning index value to be 200. What is the ending index value for the value-weighted index?

You place a stop-loss order at $78. The current share price is $82. The stock price drops the next day to $75. What is the best price you could receive for your stock?

LOL Financial is buying 100,000 shares of stock from OMG Inc., as part of a new stock issues trading on the TSX. This sale is occurring in the ___________ market

When stocks are held in an index in proportion to their total company market value, the index is

A Brief History of Risk and Return

Diversification and Risky Asset Allocation

The Investment Process

Overview of Security Types

Mutual Funds

Common Stock Valuation

Stock Price Behaviour and Market Efficiency

Behavioural Finance and the Psychology of Investing

Interest Rates

Bond Prices and Yields

Return, Risk and Security Management

Performance Evaluation and Risk Management

Options

Option Valuation

Futures Contracts

Projecting Cash Flow and Earnings

Corporate Bonds

Government Bonds and Mortgaged-Backed Securities

International Portfolio Investment

Filters

The price a dealer is willing to pay for a security is called the _ price, which is also the _ of the two prices quoted for any security.