Exam 12: Market Microstructure and Strategies

An investor sold a stock short a year ago for $50 per share.The stock's price is currently $52 per share.If the investor is unwilling to accept a loss on the short sale of more than $5 per share on the transaction, she could place a

Marziano Co.stock is quoted by a broker as bid $21.20, ask $21.40.The bid-ask spread is ____ percent.

Which of the following statements is incorrect with respect to the structure of the SEC?

Which of the following statements is incorrect?

Trading halts are imposed by

A ____ is a trading platform on a computer web site that allows investors to trade stocks without the use of a broker.

A short seller

The bid-ask spread is negatively related to

____ is an electronic communications network that was acquired by the NYSE.

The short interest ratio is commonly measured as the number of shares shorted divided by the number of shares that the firm has repurchased in the last quarter.

A(n) ____ from a broker requires the investor to put up additional collateral.

____ are required to maintain a fair and orderly market in the securities assigned to them on the New York Stock Exchange.

Assume that a stock is priced at $50 and pays an annual dividend of $2 per share.An investor purchases the stock, using only personal funds and not borrowing from the brokerage firm.If, after one year, the stock is sold at a price of $65.25 per share, the return on the stock is

Karen just purchased a stock costing $33 on margin, paying $23 and borrowing the remainder from a brokerage firm at 15 percent annual interest.The stock pays an annual dividend of $2.If Karen sells the stock after one year at a price of $50, what is the return on the stock?

A stop-loss order is a particular type of limit order whereby the investor specifies a selling price that is below the current market price of the stock.

A market order is an order to buy or sell a stock at the best possible price.

Investors can reduce their risk by purchasing a stock on margin instead of using all cash to buy the stock.

Assume that a stock is priced at $50 and pays an annual dividend of $2 per share.An investor purchases the stock on margin, paying $25 per share and borrowing the remainder from the brokerage firm at 9 percent annual interest.If, after one year, the stock is sold at a price of $65.25 per share, the return on the stock is

Until recently, international trading of stocks was limited by

A short-interest ratio of 20 or more indicates that many investors