Question 1

Many brokerage firms require that disputes between individual investors and brokers be settled through arbitration.

Accepted Answer

A) True 
 B)False

Question 2

At 10:45 a.m., Ashley placed a stop-loss order to sell 200 shares of Alpha stock at $43 a share.At 2:15 p.m., the price of Alpha fell to $42.90 and then rose to $43.40 a share by the end of the trading day.Ashley order was executed that day.Ashley would have received a price

Accepted Answer

A)  of $42.90 a share for her stock since her order was already recorded in the specialist's book. 
B)  of $43.40 a share for her stock since that was the closing price on the day of execution. 
C)  between $42.90 and $43.40 a share depending upon when her trade executed. 
D)  equal to the average prices paid by the specialist during that trading day. 
A)  of $42.90 a share for her stock since her order was already recorded in the specialist's book. 
B)  of $43.40 a share for her stock since that was the closing price on the day of execution. 
C)  between $42.90 and $43.40 a share depending upon when her trade executed. 
D)  equal to the average prices paid by the specialist during that trading day.

Question 3

An order to sell 300 shares of ABC stock at the best available price is called a

Accepted Answer

A)  limit order. 
B)  market order. 
C)  stop loss order. 
D)  fill-or-kill order. 
A)  limit order. 
B)  market order. 
C)  stop loss order. 
D)  fill-or-kill order.

Question 4

Which one of the following statements concerning stock trades is correct?

Accepted Answer

A)  Brokerage firms send customer orders to a market maker on the floor of the NYSE. 
B)  Confirmation of a trade is transmitted directly from the NYSE to the customer who placed the order. 
C)  A broker transmits OTC orders from a customer directly to a floor broker in the OTC market. 
D)  Brokerage firms generally hold securities in street name so they can be transferred without the customer's signature. 
A)  Brokerage firms send customer orders to a market maker on the floor of the NYSE. 
B)  Confirmation of a trade is transmitted directly from the NYSE to the customer who placed the order. 
C)  A broker transmits OTC orders from a customer directly to a floor broker in the OTC market. 
D)  Brokerage firms generally hold securities in street name so they can be transferred without the customer's signature.

Question 5

Information that can be found on the internet at no cost includes
I.P/E ratios.
II.recent news about a company.
III.financial statements.
IV.future earnings and stock prices.

Accepted Answer

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

Question 6

A stop-loss order is activated once the stock reaches the specified price.

Accepted Answer

A) True 
 B)False

Question 7

Charting is the technique of

Accepted Answer

A)  plotting the performance of a security over time. 
B)  sorting through databases of securities to select one based on certain parameters. 
C)  monitoring a stock based on the underlying economic conditions. 
D)  determining the amount of money that must be saved based on a given financial goal. 
A)  plotting the performance of a security over time. 
B)  sorting through databases of securities to select one based on certain parameters. 
C)  monitoring a stock based on the underlying economic conditions. 
D)  determining the amount of money that must be saved based on a given financial goal.

Question 8

A brokerage firm which provides analyst reports, investment advice and information as well as online brokerage services is called a(n)

Accepted Answer

A)  premium discount broker. 
B)  full-service broker. 
C)  basic discount broker. 
D)  electronic broker. 
A)  premium discount broker. 
B)  full-service broker. 
C)  basic discount broker. 
D)  electronic broker.

Question 9

Ryan bought a stock three years ago for $6 a share.Today, June 22, the stock is selling for $72 a share.Ryan is afraid that the price will fall and does not want to lose his profits so he places a stop-loss order to sell at $70.The stock sells between $71 and $75 throughout the remainder of the day on June 22.On the morning of June 23, the stock opens at $9 a share based on rumors of a possible bankruptcy due to inappropriate accounting procedures.Which one of the following statements is true concerning this situation?

Accepted Answer

A)  Ryan was able to sell his stock for $70 a share thereby protecting his profits. 
B)  Ryan's stock was sold for $9 a share causing him to lose most of his profits. 
C)  Ryan still owns his shares of stock since his order was never executed at the $70 price. 
D)  Ryan received a call from the specialist asking him what he wanted to do about his order. 
A)  Ryan was able to sell his stock for $70 a share thereby protecting his profits. 
B)  Ryan's stock was sold for $9 a share causing him to lose most of his profits. 
C)  Ryan still owns his shares of stock since his order was never executed at the $70 price. 
D)  Ryan received a call from the specialist asking him what he wanted to do about his order.

Question 10

What is the advantage of charting the price of a security over a period of time?

Accepted Answer

Charting provides a visual view of price

Question 11

Which of the following statements concerning day traders are correct?
I.Day traders generally do not hold securities over night.
II.Day trading is a relatively low risk approach to investing.
III.Some day traders sell stocks short.
IV.Day trading was declared illegal by the Market Stabilization Act of 2002.

Accepted Answer

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

Question 12

Shares of stock owned by an individual but held in a brokerage firm's name for ease of trading are said to be held in street name.

Accepted Answer

A) True 
 B)False

Question 13

Which one of the following is a measure of the performance of small companies?

Accepted Answer

A)  Russell 2000 
B)  Russell 1000 
C)  Russell 3000 
D)  Value Line 1700 
A)  Russell 2000 
B)  Russell 1000 
C)  Russell 3000 
D)  Value Line 1700

Question 14

When placing an order on-line, an individual investor should always double check the ticker symbol prior to submitting the order.

Accepted Answer

A) True 
 B)False

Question 15

Most brokers charge higher commissions for on-line trades than for telephone transactions.

Accepted Answer

A) True 
 B)False

Question 16

Standard and Poors and Mergent both publish extensive data on bonds.

Accepted Answer

A) True 
 B)False

Question 17

Assume you wanted to find yesterday's closing stock price for the XYZ Corporation.You would be most likely to find this information in

Accepted Answer

A)  Kiplinger's Personal Finance Magazine. 
B)  The Investor's Resource Manual. 
C)  The Granville Market Letter. 
D)  The Wall Street Journal. 
A)  Kiplinger's Personal Finance Magazine. 
B)  The Investor's Resource Manual. 
C)  The Granville Market Letter. 
D)  The Wall Street Journal.

Question 18

Assume that the S&P 500 composite stock index is 995.50.This means that

Accepted Answer

A)  the average stock in the index is selling for $99.55. 
B)  an investor would have to pay $995.50 to purchase one share of each of the stocks represented in the index. 
C)  the market values of the stocks in the index increased by a factor of 99.55 since the 1941-1943 base period. 
D)  the share prices of the stocks in the index have risen 995.50 times since 1941. 
A)  the average stock in the index is selling for $99.55. 
B)  an investor would have to pay $995.50 to purchase one share of each of the stocks represented in the index. 
C)  the market values of the stocks in the index increased by a factor of 99.55 since the 1941-1943 base period. 
D)  the share prices of the stocks in the index have risen 995.50 times since 1941.

Question 19

Chartered Financial Analysts and Certified Financial Planners must pass a rigorous series of exams, as well as meet educational and experience requirements.

Accepted Answer

A) True 
 B)False

Question 20

David opens a cash account with a brokerage firm.He buys 100 shares of GIA Co.stock at $30 a share.His broker charges a commission of $35.Which of the following statements concerning this transaction is correct?

Accepted Answer

A)  Daniel must have $3,035 in cash in his account on the day the trade is made. 
B)  Daniel must have $2,965 in cash in his account on the day the trade is made. 
C)  Daniel must have $3,035 in cash in his account within three business days. 
D)  Daniel must have $2,965 in cash in his account within five business days. 
A)  Daniel must have $3,035 in cash in his account on the day the trade is made. 
B)  Daniel must have $2,965 in cash in his account on the day the trade is made. 
C)  Daniel must have $3,035 in cash in his account within three business days. 
D)  Daniel must have $2,965 in cash in his account within five business days.

Many brokerage firms require that disputes between individual investors and brokers be settled through arbitration.

At 10:45 a.m., Ashley placed a stop-loss order to sell 200 shares of Alpha stock at $43 a share.At 2:15 p.m., the price of Alpha fell to $42.90 and then rose to $43.40 a share by the end of the trading day.Ashley order was executed that day.Ashley would have received a price

An order to sell 300 shares of ABC stock at the best available price is called a

Which one of the following statements concerning stock trades is correct?

Information that can be found on the internet at no cost includes I.P/E ratios. II.recent news about a company. III.financial statements. IV.future earnings and stock prices.

A stop-loss order is activated once the stock reaches the specified price.

Charting is the technique of

A brokerage firm which provides analyst reports, investment advice and information as well as online brokerage services is called a(n)

What is the advantage of charting the price of a security over a period of time?

Shares of stock owned by an individual but held in a brokerage firm's name for ease of trading are said to be held in street name.

Which one of the following is a measure of the performance of small companies?

When placing an order on-line, an individual investor should always double check the ticker symbol prior to submitting the order.

Most brokers charge higher commissions for on-line trades than for telephone transactions.

Standard and Poors and Mergent both publish extensive data on bonds.

Assume you wanted to find yesterday's closing stock price for the XYZ Corporation.You would be most likely to find this information in

Assume that the S&P 500 composite stock index is 995.50.This means that

Chartered Financial Analysts and Certified Financial Planners must pass a rigorous series of exams, as well as meet educational and experience requirements.

David opens a cash account with a brokerage firm.He buys 100 shares of GIA Co.stock at $30 a share.His broker charges a commission of $35.Which of the following statements concerning this transaction is correct?

The Investment Environment

Securities Markets and 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 3: Investment Information and Securities Transactions

Many brokerage firms require that disputes between individual investors and brokers be settled through arbitration.

At 10:45 a.m., Ashley placed a stop-loss order to sell 200 shares of Alpha stock at $43 a share.At 2:15 p.m., the price of Alpha fell to $42.90 and then rose to $43.40 a share by the end of the trading day.Ashley order was executed that day.Ashley would have received a price

An order to sell 300 shares of ABC stock at the best available price is called a

Which one of the following statements concerning stock trades is correct?

Information that can be found on the internet at no cost includes I.P/E ratios. II.recent news about a company. III.financial statements. IV.future earnings and stock prices.

A stop-loss order is activated once the stock reaches the specified price.

Charting is the technique of

A brokerage firm which provides analyst reports, investment advice and information as well as online brokerage services is called a(n)

What is the advantage of charting the price of a security over a period of time?

Shares of stock owned by an individual but held in a brokerage firm's name for ease of trading are said to be held in street name.

Which one of the following is a measure of the performance of small companies?

When placing an order on-line, an individual investor should always double check the ticker symbol prior to submitting the order.

Most brokers charge higher commissions for on-line trades than for telephone transactions.

Standard and Poors and Mergent both publish extensive data on bonds.

Assume you wanted to find yesterday's closing stock price for the XYZ Corporation.You would be most likely to find this information in

Assume that the S&P 500 composite stock index is 995.50.This means that

Chartered Financial Analysts and Certified Financial Planners must pass a rigorous series of exams, as well as meet educational and experience requirements.

David opens a cash account with a brokerage firm.He buys 100 shares of GIA Co.stock at $30 a share.His broker charges a commission of $35.Which of the following statements concerning this transaction is correct?

The Investment Environment

Securities Markets and 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