Question 1

A(n) _________ arranges security transactions between investors.

Accepted Answer

A)  Agent 
B)  Broker 
C)  Underwriter 
D)  Dealer 
E)  investment banker 
A)  Agent 
B)  Broker 
C)  Underwriter 
D)  Dealer 
E)  investment banker

Question 2

-With an order to sell 100 shares at the market price, at what price will this order be filled?

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 3

You currently own 145,000 shares of a stock. You will sell those shares for $16.20 a share. You are also willing to purchase additional shares for $16.50 a share. Indeed, you are performing as a securities ___________.

Accepted Answer

A)  Broker 
B)  Representative 
C)  Underwriter 
D)  Specialist 
E)  Dealer 
A)  Broker 
B)  Representative 
C)  Underwriter 
D)  Specialist 
E)  Dealer

Question 4

The Montreal Exchange is the Canadian home for trading __________?

Accepted Answer

A)  junior mining companies. 
B)  commodities futures. 
C)  senior issues. 
D)  IPOs 
E)  derivatives. 
A)  junior mining companies. 
B)  commodities futures. 
C)  senior issues. 
D)  IPOs 
E)  derivatives.

Question 5

The difference between the price a dealer will pay for a stock and the price for which a dealer will sell a stock is the ________.

Accepted Answer

A)  Margin 
B)  Offer margin 
C)  Dealer concession 
D)  Spread 
E)  Profit margin 
A)  Margin 
B)  Offer margin 
C)  Dealer concession 
D)  Spread 
E)  Profit margin

Question 6

-The last two trades on a stock were $78.13 and then $78.16. If you place an order to short sell the stock, your order can be executed at:

Accepted Answer

A)  $78.13 or higher. 
B)  $78.13 or lower. 
C)  $78.16 or higher. 
D)  $78.16 or lower 
E)  any price. 
A)  $78.13 or higher. 
B)  $78.13 or lower. 
C)  $78.16 or higher. 
D)  $78.16 or lower 
E)  any price.

Question 7

Your company just sold 1.5 million shares through an IPO offering. The shares were offered at $16 a share and all shares were sold. Your firm received a total of $22.5 million as a fixed commitment. What percent of the offering price did the underwriter's charge as their fee?

Accepted Answer

A)  4.75% 
B)  5.00% 
C)  5.50% 
D)  6.25% 
E)  6.50% 
A)  4.75% 
B)  5.00% 
C)  5.50% 
D)  6.25% 
E)  6.50%

Question 8

-If Silver and Platinum are the only two stocks in the index, what is the price-weighted index return?

Accepted Answer

A)  5.89% 
B)  4.48% 
C)  5.95% 
D)  4.04% 
E)  5.36% 
A)  5.89% 
B)  4.48% 
C)  5.95% 
D)  4.04% 
E)  5.36%

Question 9

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 10

ABC Underwriters has agreed to a firm commitment underwriting in which they will pay you $20.75 million in exchanging for 2 million shares of stock for an IPO offering for your company. The offering price is expected to be $11 a share. If ABC can sell all of the shares, they will earn underwriting fee of ___________.

Accepted Answer

A)  $1.00 million 
B)  $1.25 million 
C)  $1.50 million 
D)  $2.00 million 
E)  $2.50 million 
A)  $1.00 million 
B)  $1.25 million 
C)  $1.50 million 
D)  $2.00 million 
E)  $2.50 million

Question 11

A yard sale would be an example of a ___________ market.

Accepted Answer

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

Question 12

The major commodity exchange in Canada is located in _____________.

Accepted Answer

A)  Winnipeg 
B)  Calgary 
C)  Toronto 
D)  Montreal 
E)  Halifax 
A)  Winnipeg 
B)  Calgary 
C)  Toronto 
D)  Montreal 
E)  Halifax

Question 13

ABC Underwriters paid your firm $33.66 million as IPO proceeds. The IPO offered 2.25 million shares of which 2.02 million were sold at an offering price of $16 a share. The underwriter spread was 6.5%. What type of underwriting was this?

Accepted Answer

A)  Best effort 
B)  Variable 
C)  Fixed commitment 
D)  Plain vanilla 
E)  Standby 
A)  Best effort 
B)  Variable 
C)  Fixed commitment 
D)  Plain vanilla 
E)  Standby

Question 14

_______ occurs when some of the stock in the index has not traded recently.

Accepted Answer

A)  Index illiquidity 
B)  Late trading 
C)  Index delay 
D)  Index staleness 
E)  Late returns 
A)  Index illiquidity 
B)  Late trading 
C)  Index delay 
D)  Index staleness 
E)  Late returns

Question 15

-If Silver and Platinum are the only two stocks in the index, what is the value-weighted index return?

Accepted Answer

A)  5.89% 
B)  4.48% 
C)  5.95% 
D)  4.04% 
E)  5.36% 
A)  5.89% 
B)  4.48% 
C)  5.95% 
D)  4.04% 
E)  5.36%

Question 16

The market for exchange listed securities in which investors trade directly with each other through a computer network is referred to as the ___________ market.

Accepted Answer

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

Question 17

A stock market index in which stocks are held in proportion to their share prices is called a ___________ index.

Accepted Answer

A)  Balanced 
B)  Market-weighted 
C)  Diluted 
D)  Price-weighted 
E)  Value-weighted 
A)  Balanced 
B)  Market-weighted 
C)  Diluted 
D)  Price-weighted 
E)  Value-weighted

Question 18

Which of the following will usually be listed in a tombstone?

Accepted Answer

A)  Names of the underwriters 
B)  Name of the issuer 
C)  Offering price 
D)  Value of the issue 
E)  All of the above 
A)  Names of the underwriters 
B)  Name of the issuer 
C)  Offering price 
D)  Value of the issue 
E)  All of the above

Question 19

-Suppose you place a market order to buy 100 shares of this stock. Ignoring commissions, how much will you pay for your order?

Accepted Answer

A)  $4,563 
B)  $4,566 
C)  $4,565 
D)  $4,561 
E)  $4,557 
A)  $4,563 
B)  $4,566 
C)  $4,565 
D)  $4,561 
E)  $4,557

Question 20

The index divisor

Accepted Answer

A)  For the DJIA is 30 
B)  Remain constant once it is established 
C)  Tends to increase over time 
D)  Is equal to the number of stocks in the index 
E)  Decreases in response to stock splits 
A)  For the DJIA is 30 
B)  Remain constant once it is established 
C)  Tends to increase over time 
D)  Is equal to the number of stocks in the index 
E)  Decreases in response to stock splits

A(n) _________ arranges security transactions between investors.

-With an order to sell 100 shares at the market price, at what price will this order be filled?

You currently own 145,000 shares of a stock. You will sell those shares for $16.20 a share. You are also willing to purchase additional shares for $16.50 a share. Indeed, you are performing as a securities ___________.

The Montreal Exchange is the Canadian home for trading __________?

The difference between the price a dealer will pay for a stock and the price for which a dealer will sell a stock is the ________.

-The last two trades on a stock were $78.13 and then $78.16. If you place an order to short sell the stock, your order can be executed at:

Your company just sold 1.5 million shares through an IPO offering. The shares were offered at $16 a share and all shares were sold. Your firm received a total of $22.5 million as a fixed commitment. What percent of the offering price did the underwriter's charge as their fee?

-If Silver and Platinum are the only two stocks in the index, what is the price-weighted index return?

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

A yard sale would be an example of a ___________ market.

The major commodity exchange in Canada is located in _____________.

ABC Underwriters paid your firm $33.66 million as IPO proceeds. The IPO offered 2.25 million shares of which 2.02 million were sold at an offering price of $16 a share. The underwriter spread was 6.5%. What type of underwriting was this?

_______ occurs when some of the stock in the index has not traded recently.

-If Silver and Platinum are the only two stocks in the index, what is the value-weighted index return?

The market for exchange listed securities in which investors trade directly with each other through a computer network is referred to as the ___________ market.

A stock market index in which stocks are held in proportion to their share prices is called a ___________ index.

Which of the following will usually be listed in a tombstone?

-Suppose you place a market order to buy 100 shares of this stock. Ignoring commissions, how much will you pay for your order?

The index divisor

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

A(n) _________ arranges security transactions between investors.

-With an order to sell 100 shares at the market price, at what price will this order be filled?

You currently own 145,000 shares of a stock. You will sell those shares for $16.20 a share. You are also willing to purchase additional shares for $16.50 a share. Indeed, you are performing as a securities ___________.

The Montreal Exchange is the Canadian home for trading __________?

The difference between the price a dealer will pay for a stock and the price for which a dealer will sell a stock is the ________.

-The last two trades on a stock were $78.13 and then $78.16. If you place an order to short sell the stock, your order can be executed at:

Your company just sold 1.5 million shares through an IPO offering. The shares were offered at $16 a share and all shares were sold. Your firm received a total of $22.5 million as a fixed commitment. What percent of the offering price did the underwriter's charge as their fee?

-If Silver and Platinum are the only two stocks in the index, what is the price-weighted index return?

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

A yard sale would be an example of a ___________ market.

The major commodity exchange in Canada is located in _____________.

ABC Underwriters paid your firm $33.66 million as IPO proceeds. The IPO offered 2.25 million shares of which 2.02 million were sold at an offering price of $16 a share. The underwriter spread was 6.5%. What type of underwriting was this?

_______ occurs when some of the stock in the index has not traded recently.

-If Silver and Platinum are the only two stocks in the index, what is the value-weighted index return?

The market for exchange listed securities in which investors trade directly with each other through a computer network is referred to as the ___________ market.

A stock market index in which stocks are held in proportion to their share prices is called a ___________ index.

Which of the following will usually be listed in a tombstone?

-Suppose you place a market order to buy 100 shares of this stock. Ignoring commissions, how much will you pay for your order?

The index divisor

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