Question 1

Large technology companies such as IBM and Microsoft trade

Accepted Answer

A) exclusively on the NASDAQ. 
B) exclusively on the NYSE. 
C) on either the NASDAQ or the NYSE. 
D) exclusively on alternative trading systems. 
A) exclusively on the NASDAQ. 
B) exclusively on the NYSE. 
C) on either the NASDAQ or the NYSE. 
D) exclusively on alternative trading systems.

Question 2

Which of the following are provisions of the Sarbanes-Oxley Act of 2002?
I.an oversight board to monitor the accounting industry
II.tougher penalties for executives who commit corporate fraud
III.stricter prohibitions against insider trading
IV.guidelines for analysts conflicts of interest

Accepted Answer

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

Question 3

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 4

Stocks of many large foreign companies such as Toyota trade on the NYSE as well as on exchanges in their own country.

Accepted Answer

A) True 
 B)False

Question 5

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 6

Functioning securities exchanges are located in
I.Brazil
II.China
III.Russia
IV.South Korea

Accepted Answer

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

Question 7

The NYSE is part of the world's largest international trading network known as NYSE Euronext.

Accepted Answer

A) True 
 B)False

Question 8

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 9

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 10

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 11

The effects of fluctuating foreign exchange rates may
I.increase a U.S.investor's rate of return.
II.decrease a U.S.investor's rate of return.
III.can be avoided by investing in ADRs.
IV.can be avoided by investing in mutual funds that specialize in foreign stocks.

Accepted Answer

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

Question 12

Margin trading requires the borrowing of securities.

Accepted Answer

A) True 
 B)False

Question 13

The financial crisis of 2008 resulted in

Accepted Answer

A) a steep increase in the price of newly issued stock because supply was limited. 
B) new regulations affecting initial public offerings. 
C) a sharp reduction in the number of initial public offerings. 
D) B and C, but not A. 
A) a steep increase in the price of newly issued stock because supply was limited. 
B) new regulations affecting initial public offerings. 
C) a sharp reduction in the number of initial public offerings. 
D) B and C, but not A.

Question 14

A restricted account is defined as a margin account wherein the equity is

Accepted Answer

A) less than the initial margin amount. 
B) greater than the initial margin amount. 
C) less than the maintenance margin amount. 
D) greater than the maintenance margin amount. 
A) less than the initial margin amount. 
B) greater than the initial margin amount. 
C) less than the maintenance margin amount. 
D) greater than the maintenance margin amount.

Question 15

Which of the following are associated with bear markets?
I.investor pessimism
II.rising profits
III.economic slowdown
IV.rising security prices

Accepted Answer

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

Question 16

Short selling requires the borrowing of securities.

Accepted Answer

A) True 
 B)False

Question 17

Which one of the following statements about the NYSE is correct?

Accepted Answer

A) Each member of the exchange owns a trading post. 
B) Any listed stock may be traded at any of 20 trading posts. 
C) Brokerage firms are only permitted to have one individual trading on the floor of the exchange. 
D) Buy orders are filled at the lowest price and sell orders are filled at the highest price. 
A) Each member of the exchange owns a trading post. 
B) Any listed stock may be traded at any of 20 trading posts. 
C) Brokerage firms are only permitted to have one individual trading on the floor of the exchange. 
D) Buy orders are filled at the lowest price and sell orders are filled at the highest price.

Question 18

Emily bought 200 shares of ABC Co.stock for $29.00 per share on 60% margin.Assume she holds the stock for one year and that her interest costs will be $80 over the holding period.Ignoring commissions, what is her percentage return (loss)on invested capital if the stock price went down 10%?

Accepted Answer

A) -32% 
B) -19% 
C) -16% 
D) -10% 
A) -32% 
B) -19% 
C) -16% 
D) -10%

Question 19

Which one of the following statements about margin trading is correct?

Accepted Answer

A) The Securities Exchange Commission sets the minimum margin requirement for margin trading. 
B) If Fred buys $1,000 worth of stock using 60% margin, he will need to pay $600 in cash to make the purchase. 
C) Margin traders are willing to accept lower return to reduce their risk. 
D) Margin traders are pessimistic about the future price of the stock. 
A) The Securities Exchange Commission sets the minimum margin requirement for margin trading. 
B) If Fred buys $1,000 worth of stock using 60% margin, he will need to pay $600 in cash to make the purchase. 
C) Margin traders are willing to accept lower return to reduce their risk. 
D) Margin traders are pessimistic about the future price of the stock.

Question 20

The Securities Exchange Act of 1934

Accepted Answer

A) requires full disclosure of information on all new security issues. 
B) authorized the SEC to regulate mutual funds. 
C) established trade associations such as the NASD. 
D) created the SEC as the regulator of the securities exchanges. 
A) requires full disclosure of information on all new security issues. 
B) authorized the SEC to regulate mutual funds. 
C) established trade associations such as the NASD. 
D) created the SEC as the regulator of the securities exchanges.

Large technology companies such as IBM and Microsoft trade

Which of the following are provisions of the Sarbanes-Oxley Act of 2002? I.an oversight board to monitor the accounting industry II.tougher penalties for executives who commit corporate fraud III.stricter prohibitions against insider trading IV.guidelines for analysts conflicts of interest

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

Stocks of many large foreign companies such as Toyota trade on the NYSE as well as on exchanges in their own country.

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

Functioning securities exchanges are located in I.Brazil II.China III.Russia IV.South Korea

The NYSE is part of the world's largest international trading network known as NYSE Euronext.

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

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.

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

The effects of fluctuating foreign exchange rates may I.increase a U.S.investor's rate of return. II.decrease a U.S.investor's rate of return. III.can be avoided by investing in ADRs. IV.can be avoided by investing in mutual funds that specialize in foreign stocks.

Margin trading requires the borrowing of securities.

The financial crisis of 2008 resulted in

A restricted account is defined as a margin account wherein the equity is

Which of the following are associated with bear markets? I.investor pessimism II.rising profits III.economic slowdown IV.rising security prices

Short selling requires the borrowing of securities.

Which one of the following statements about the NYSE is correct?

Emily bought 200 shares of ABC Co.stock for $29.00 per share on 60% margin.Assume she holds the stock for one year and that her interest costs will be $80 over the holding period.Ignoring commissions, what is her percentage return (loss)on invested capital if the stock price went down 10%?

Which one of the following statements about margin trading is correct?

The Securities Exchange Act of 1934

The Investment Environment

Investment Information and Securities Transactions

Return and Risk

Modern Portfolio Concepts

Common Stocks

Analyzing Common Stocks

Stock Valuation

Market Efficiency and Behavioral Finance

Fixed-Income Securities

Bond Valuation

Mutual Funds and Exchange-Traded Funds

Managing Your Own Portfolio

Options: Puts and Calls

Futures Markets and Securities

Filters

Exam 2: Securities Markets and Transactions

Large technology companies such as IBM and Microsoft trade

Which of the following are provisions of the Sarbanes-Oxley Act of 2002? I.an oversight board to monitor the accounting industry II.tougher penalties for executives who commit corporate fraud III.stricter prohibitions against insider trading IV.guidelines for analysts conflicts of interest

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

Stocks of many large foreign companies such as Toyota trade on the NYSE as well as on exchanges in their own country.

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

Functioning securities exchanges are located in I.Brazil II.China III.Russia IV.South Korea

The NYSE is part of the world's largest international trading network known as NYSE Euronext.

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

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.

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

The effects of fluctuating foreign exchange rates may I.increase a U.S.investor's rate of return. II.decrease a U.S.investor's rate of return. III.can be avoided by investing in ADRs. IV.can be avoided by investing in mutual funds that specialize in foreign stocks.

Margin trading requires the borrowing of securities.

The financial crisis of 2008 resulted in

A restricted account is defined as a margin account wherein the equity is

Which of the following are associated with bear markets? I.investor pessimism II.rising profits III.economic slowdown IV.rising security prices

Short selling requires the borrowing of securities.

Which one of the following statements about the NYSE is correct?

Emily bought 200 shares of ABC Co.stock for $29.00 per share on 60% margin.Assume she holds the stock for one year and that her interest costs will be $80 over the holding period.Ignoring commissions, what is her percentage return (loss)on invested capital if the stock price went down 10%?

Which one of the following statements about margin trading is correct?

The Securities Exchange Act of 1934

The Investment Environment

Investment Information and Securities Transactions

Return and Risk

Modern Portfolio Concepts

Common Stocks

Analyzing Common Stocks

Stock Valuation

Market Efficiency and Behavioral Finance

Fixed-Income Securities

Bond Valuation

Mutual Funds and Exchange-Traded Funds

Managing Your Own Portfolio

Options: Puts and Calls

Futures Markets and Securities

Filters