Exam 2: Securities Markets and Transactions

Aria has heard a rumor that a major food company will be forced to recall millions of jars of peanut butter.due to contamination If the rumors are true, the company's stock price will decline sharply.Which one of the following strategies would allow Jennifer to earn a profit if the rumor proves to be true?

Investment bankers who join together to share the financial risk associated with buying an entire issue of new securities and reselling them to the public is called a(n)

Which of the following is currently a requirement for a stock to be listed on the NYSE?

The dominant exchange for trading options contracts is the ________.The dominant player in the trading of futures contracts is ________.

Exchange traded funds (ETFs)perform like a broad market index but are bought and sold like individual stocks.

Research indicates that investors are more likely to overreact to news when trading after hours.

Primary markets deal in the stocks of larger, well-known companies; secondary markets deal in the stocks of smaller, less well-known companies.

The Sarbanes-Oxley Act of 2002 strengthens accounting disclosure requirements and ethical guidelines for financial officers.

The primary market tends to be more active when

The NYSE Euronext includes exchanges in all of the following cities EXCEPT

Stocks, bonds and mutual fund shares are bought and sold in the capital market.

Joseph bought 100 shares of stock at a price of $24 a share.He used his 70% margin account to make the purchase.Joseph sold his stock after a year for $20 a share.Ignoring margin interest and trading costs, what is Joseph's return on investor's equity for this investment?

The U.S.stock markets tend to produce the highest rate of return each year.

Only U.S.corporations can list their stocks on the NYSE.

The Sarbanes-Oxley Act of 2002 focuses on

Participation in foreign stock markets is complicated and expensive for American investors.

Which one of the following statements concerning the primary market is correct?

Assume the foreign exchange rate for the euro was U.S.$1.00 = .91 euro last month.This month, the exchange rate is U.S.$1.00 = .88 euro.This information indicates that over the past month the

Stocks purchased in the secondary market are purchased

Crossing markets are those that