Question 1

The document that describes the issuer of a security's management and financial position is known as a

Accepted Answer

A)  balance sheet. 
B)  10-K report. 
C)  prospectus. 
D)  red herring. 
A)  balance sheet. 
B)  10-K report. 
C)  prospectus. 
D)  red herring.

Question 2

If an investor does not respond to a margin call, the broker will

Accepted Answer

A)  sell enough of the investor's holdings that the margin account can be closed. 
B)  sell some of the investor's holdings to cover the margin call. 
C)  notify the Federal Reserve so they can cover the call. 
D)  sell all of the investor's holdings and close their brokerage account. 
A)  sell enough of the investor's holdings that the margin account can be closed. 
B)  sell some of the investor's holdings to cover the margin call. 
C)  notify the Federal Reserve so they can cover the call. 
D)  sell all of the investor's holdings and close their brokerage account.

Question 3

There are many differences between broker markets and dealer markets.These differences include such things as membership, location, regulation, and several other characteristics.Discuss at least five key differences between these two markets.

Accepted Answer

BROKER MARKETS-listing requirements, cen

Question 4

IPOs are relatively safe investments.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following characteristics apply to trading before and after regular hours?
I.Stock prices can vary from one ECN to another ECN.
II.Most brokerage firms require individual investors to place only market orders for after-hours trades.
III.The NYSE offers after-hours trading at that day's closing prices.
IV.After-hours markets tend to be more volatile and less liquid than the regular trading sessions.

Accepted Answer

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

Question 6

Options allow their holders to sell or to buy another security during a stated period of time at a specified price.

Accepted Answer

A) True 
 B)False

Question 7

The Sarbanes-Oxley Act of 2002 focuses on

Accepted Answer

A)  insider trading. 
B)  IPOs. 
C)  accounting and other public disclosures of information. 
D)  regulation of the OTC markets. 
A)  insider trading. 
B)  IPOs. 
C)  accounting and other public disclosures of information. 
D)  regulation of the OTC markets.

Question 8

The NYSE and AMEX are examples of dealer markets.

Accepted Answer

A) True 
 B)False

Question 9

Companies offering their stock to the public for the first time usually seek the assistance of

Accepted Answer

A)  investment bankers. 
B)  the Securities and Exchange Commission. 
C)  the Federal Reserve Bank. 
D)  prospectors. 
A)  investment bankers. 
B)  the Securities and Exchange Commission. 
C)  the Federal Reserve Bank. 
D)  prospectors.

Question 10

Lauren purchased 200 shares of stock at $19 using her 70% margin account.Her maintenance margin is 40%.Lauren has no other securities in her account.At what price will Lauren receive a margin call?

Accepted Answer

A)  $13.30 
B)  $9.50 
C)  $5.70 
D)  $3.80 
A)  $13.30 
B)  $9.50 
C)  $5.70 
D)  $3.80

Question 11

When a person sells a common stock short, she or he is betting that the price of the stock will fall.

Accepted Answer

A) True 
 B)False

Question 12

A company must observe a quiet period from the time it files a registration statement with the SEC until at least one month after an IPO is complete.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following are associated with bull markets?
I.investor pessimism
II.government stimulus
III.economic recovery
IV.low inflation

Accepted Answer

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

Question 14

The price an individual investor will pay to purchase a stock in the OTC market is the

Accepted Answer

A)  spread. 
B)  ask price. 
C)  bid price. 
D)  broker price. 
A)  spread. 
B)  ask price. 
C)  bid price. 
D)  broker price.

Question 15

The over-the-counter (OTC)market is a

Accepted Answer

A)  centrally located auction market. 
B)  telecommunications network connecting dealers. 
C)  market solely for institutional traders. 
D)  geographically dispersed auction market. 
A)  centrally located auction market. 
B)  telecommunications network connecting dealers. 
C)  market solely for institutional traders. 
D)  geographically dispersed auction market.

Question 16

Last week, Seward Company stock was selling at $66 a share when Ryan sold 300 shares of the stock short.Today Ryan bought 300 shares of the same stock at a price of $70.00 share to cover his position.Ignoring trading costs, what is the dollar return on Sam's investment?

Accepted Answer

A)  $1,200 
B)  -$400 
C)  $400 
D)  $-1,200 
A)  $1,200 
B)  -$400 
C)  $400 
D)  $-1,200

Question 17

Margin trading will magnify losses on a percentage basis.

Accepted Answer

A) True 
 B)False

Question 18

ECNs are

Accepted Answer

A)  publicly-owned auction markets for listed stocks. 
B)  privately-owned networks that transact trades between institutional investors. 
C)  facilities used by market makers for trading unlisted securities. 
D)  part of the third market which trades listed securities between individual investors. 
A)  publicly-owned auction markets for listed stocks. 
B)  privately-owned networks that transact trades between institutional investors. 
C)  facilities used by market makers for trading unlisted securities. 
D)  part of the third market which trades listed securities between individual investors.

Question 19

Insider trading is the use of nonpublic information about a security to gain a profit.

Accepted Answer

A) True 
 B)False

Question 20

Kayla invested $3,000 and purchased shares of a German corporation when the exchange rate was $1.00 = .70 euro.After six months, she sold all of the shares for 3,180 euros, when the exchange rate was $1.00 = .68 euro.No dividends were paid during the time Heidi owned the shares of stock.What is the amount of Kayla's gain or loss on this investment?

Accepted Answer

A)  $129.60 gain 
B)  $1676 gain 
C)  $1676 loss 
D)  $250 loss 
A)  $129.60 gain 
B)  $1676 gain 
C)  $1676 loss 
D)  $250 loss

The document that describes the issuer of a security's management and financial position is known as a

If an investor does not respond to a margin call, the broker will

There are many differences between broker markets and dealer markets.These differences include such things as membership, location, regulation, and several other characteristics.Discuss at least five key differences between these two markets.

IPOs are relatively safe investments.

Options allow their holders to sell or to buy another security during a stated period of time at a specified price.

The Sarbanes-Oxley Act of 2002 focuses on

The NYSE and AMEX are examples of dealer markets.

Companies offering their stock to the public for the first time usually seek the assistance of

Lauren purchased 200 shares of stock at $19 using her 70% margin account.Her maintenance margin is 40%.Lauren has no other securities in her account.At what price will Lauren receive a margin call?

When a person sells a common stock short, she or he is betting that the price of the stock will fall.

A company must observe a quiet period from the time it files a registration statement with the SEC until at least one month after an IPO is complete.

Which of the following are associated with bull markets? I.investor pessimism II.government stimulus III.economic recovery IV.low inflation

The price an individual investor will pay to purchase a stock in the OTC market is the

The over-the-counter (OTC)market is a

Last week, Seward Company stock was selling at $66 a share when Ryan sold 300 shares of the stock short.Today Ryan bought 300 shares of the same stock at a price of $70.00 share to cover his position.Ignoring trading costs, what is the dollar return on Sam's investment?

Margin trading will magnify losses on a percentage basis.

ECNs are

Insider trading is the use of nonpublic information about a security to gain a profit.

The Investment Environment

Investment Information and Securities Transactions

Return and Risk

Modern Portfolio Concepts

Common Stocks

Analyzing Common Stocks

Stock Valuation

Market Efficiency, Behavioral Finance, and Technical Analysis

Fixed-Income Securities

Bond Valuation

Mutual Funds: Professionally Managed Portfolios

Managing Your Own Portfolios

Options: Puts and Calls

Commodities and Financial Futures

Filters

Exam 2: Securities Markets and Transactions

The document that describes the issuer of a security's management and financial position is known as a

If an investor does not respond to a margin call, the broker will

There are many differences between broker markets and dealer markets.These differences include such things as membership, location, regulation, and several other characteristics.Discuss at least five key differences between these two markets.

IPOs are relatively safe investments.

Options allow their holders to sell or to buy another security during a stated period of time at a specified price.

The Sarbanes-Oxley Act of 2002 focuses on

The NYSE and AMEX are examples of dealer markets.

Companies offering their stock to the public for the first time usually seek the assistance of

Lauren purchased 200 shares of stock at $19 using her 70% margin account.Her maintenance margin is 40%.Lauren has no other securities in her account.At what price will Lauren receive a margin call?

When a person sells a common stock short, she or he is betting that the price of the stock will fall.

A company must observe a quiet period from the time it files a registration statement with the SEC until at least one month after an IPO is complete.

Which of the following are associated with bull markets? I.investor pessimism II.government stimulus III.economic recovery IV.low inflation

The price an individual investor will pay to purchase a stock in the OTC market is the

The over-the-counter (OTC)market is a

Last week, Seward Company stock was selling at $66 a share when Ryan sold 300 shares of the stock short.Today Ryan bought 300 shares of the same stock at a price of $70.00 share to cover his position.Ignoring trading costs, what is the dollar return on Sam's investment?

Margin trading will magnify losses on a percentage basis.

ECNs are

Insider trading is the use of nonpublic information about a security to gain a profit.

The Investment Environment

Investment Information and Securities Transactions

Return and Risk

Modern Portfolio Concepts

Common Stocks

Analyzing Common Stocks

Stock Valuation

Market Efficiency, Behavioral Finance, and Technical Analysis

Fixed-Income Securities

Bond Valuation

Mutual Funds: Professionally Managed Portfolios

Managing Your Own Portfolios

Options: Puts and Calls

Commodities and Financial Futures

Filters