Question 1

An act explicitly defining and prohibiting insider trading was passed in

Accepted Answer

A) 1934. 
B) 1975. 
C) 1988. 
D) 2002. 
A) 1934. 
B) 1975. 
C) 1988. 
D) 2002.

Question 2

The Consumer Financial Protection Agency was established by

Accepted Answer

A) Investment Company Act of 1940. 
B) The Securities Acts Amendments of 1975. 
C) The Sarbanes-Oxley Act of 2002. 
D) The Dodd-Frank Act of 2010. 
A) Investment Company Act of 1940. 
B) The Securities Acts Amendments of 1975. 
C) The Sarbanes-Oxley Act of 2002. 
D) The Dodd-Frank Act of 2010.

Question 3

A market where securities are are bought from or sold to a market maker is known as a

Accepted Answer

A) broker market. 
B) dealer market. 
C) exchange floor. 
D) board of exchange. 
A) broker market. 
B) dealer market. 
C) exchange floor. 
D) board of exchange.

Question 4

The purpose of the "quiet period" a company must observe from the time it files a registration statement with the SEC until after an IPO is complete is to assure that all investors receive the same information.

Accepted Answer

A) True 
 B)False

Question 5

A rights offering is the

Accepted Answer

A) initial offering of securities to the public. 
B) offering of new securities to current shareholders on a pro-rata basis. 
C) sale of newly issued shares of stock to the general public. 
D) sale of securities directly to a select group of investors. 
A) initial offering of securities to the public. 
B) offering of new securities to current shareholders on a pro-rata basis. 
C) sale of newly issued shares of stock to the general public. 
D) sale of securities directly to a select group of investors.

Question 6

The price of stock sold in an IPO is set by bids submitted in the month before trading begins.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following characteristics apply to trading before and after regular hours?
I.Most after hours trades match a bid price to a corresponding offer price.
II.Most brokerage firms require individual investors to place only market orders for after-hours trades.
III.Electronic Communications Networks (ECNs)play a key role in after hours trading.
IV.After-hours trading begins at 4:00 P.M.and ends at 9:30 A.M.eastern time.

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 8

Kayla invested $3,000 and purchased shares of a German corporation when the exchange rate was $1.00 = .91 euro.After six months, she sold all of the shares for 3,180 euros, when the exchange rate was $1.00 = .88 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) $613.64 loss 
B) $613.64 gain 
C) $497.60 loss 
D) $497.60 gain 
A) $613.64 loss 
B) $613.64 gain 
C) $497.60 loss 
D) $497.60 gain

Question 9

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.All things equal, the dollar value of European stocks

Accepted Answer

A) decreased. 
B) increased. 
C) stayed the same. 
D) would vary depending on the country. 
A) decreased. 
B) increased. 
C) stayed the same. 
D) would vary depending on the country.

Question 10

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 11

A brokerage firm may set a higher margin requirement than that set by the Federal Reserve Board.

Accepted Answer

A) True 
 B)False

Question 12

IPO activity tends to peak when stock prices

Accepted Answer

A) have fallen sharply. 
B) have risen sharply. 
C) are volatile and unstable. 
D) Stock prices have relatively little influence on IPO activity. 
A) have fallen sharply. 
B) have risen sharply. 
C) are volatile and unstable. 
D) Stock prices have relatively little influence on IPO activity.

Question 13

Which of the following are correct statements concerning the NYSE?
I.Each stock has a designated location, called a post, at which its shares are traded.
II.The NYSE is a dealer market.
III.Supply and demand determines the price of each security.
IV.A specialist buys and sells to maintain a market for a particular security.

Accepted Answer

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

Question 14

Firms that list their stock on an exchange can be delisted for failing to meet the requirements of the exchange.

Accepted Answer

A) True 
 B)False

Question 15

Which one of the following statements about foreign investments is true?

Accepted Answer

A) In general, major foreign markets always tend to underperform the U.S.market. 
B) Investing in foreign markets may involve specific risks not encountered with domestic securities. 
C) Investing in foreign markets will always produce higher returns because of exchange rate fluctuations. 
D) Foreign markets include equity securities only. 
A) In general, major foreign markets always tend to underperform the U.S.market. 
B) Investing in foreign markets may involve specific risks not encountered with domestic securities. 
C) Investing in foreign markets will always produce higher returns because of exchange rate fluctuations. 
D) Foreign markets include equity securities only.

Question 16

The Securities Act of 1933 deals mostly with primary markets.

Accepted Answer

A) True 
 B)False

Question 17

The minimum initial margin requirement for both long and short positions is set by the Federal Reserve Board and currently is 50%.

Accepted Answer

A) True 
 B)False

Question 18

Describe the initial public offering (IPO)process and explain the role of the underwriter, the Securities and Exchange Commission (SEC), and the red herring.

Accepted Answer

The underwriter is responsible for promo

Question 19

In recent years, trading in secondary markets has increasingly become a function of

Accepted Answer

A) securities exchanges. 
B) dealer markets. 
C) technology that by-passes both brokers and dealers. 
D) broker-dealer markets using consolidated venues and technologies. 
A) securities exchanges. 
B) dealer markets. 
C) technology that by-passes both brokers and dealers. 
D) broker-dealer markets using consolidated venues and technologies.

Question 20

Options contracts on stocks may

Accepted Answer

A) grant the owner the right to buy the stock at a specified price over a specified period of time. 
B) grant the owner the right to sell the stock at a specified price over a specified period of time. 
C) depending on the type of contract, grant the owner the right to either buy or sell the stock at a specified price over a specified period of time. 
D) legally oblige the owner to buy the stock at a specified price over a specified period of time. 
A) grant the owner the right to buy the stock at a specified price over a specified period of time. 
B) grant the owner the right to sell the stock at a specified price over a specified period of time. 
C) depending on the type of contract, grant the owner the right to either buy or sell the stock at a specified price over a specified period of time. 
D) legally oblige the owner to buy the stock at a specified price over a specified period of time.

An act explicitly defining and prohibiting insider trading was passed in

The Consumer Financial Protection Agency was established by

A market where securities are are bought from or sold to a market maker is known as a

The purpose of the "quiet period" a company must observe from the time it files a registration statement with the SEC until after an IPO is complete is to assure that all investors receive the same information.

A rights offering is the

The price of stock sold in an IPO is set by bids submitted in the month before trading begins.

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.All things equal, the dollar value of European stocks

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

A brokerage firm may set a higher margin requirement than that set by the Federal Reserve Board.

IPO activity tends to peak when stock prices

Firms that list their stock on an exchange can be delisted for failing to meet the requirements of the exchange.

Which one of the following statements about foreign investments is true?

The Securities Act of 1933 deals mostly with primary markets.

The minimum initial margin requirement for both long and short positions is set by the Federal Reserve Board and currently is 50%.

Describe the initial public offering (IPO)process and explain the role of the underwriter, the Securities and Exchange Commission (SEC), and the red herring.

In recent years, trading in secondary markets has increasingly become a function of

Options contracts on stocks may

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

An act explicitly defining and prohibiting insider trading was passed in

The Consumer Financial Protection Agency was established by

A market where securities are are bought from or sold to a market maker is known as a

The purpose of the "quiet period" a company must observe from the time it files a registration statement with the SEC until after an IPO is complete is to assure that all investors receive the same information.

A rights offering is the

The price of stock sold in an IPO is set by bids submitted in the month before trading begins.

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.All things equal, the dollar value of European stocks

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

A brokerage firm may set a higher margin requirement than that set by the Federal Reserve Board.

IPO activity tends to peak when stock prices

Firms that list their stock on an exchange can be delisted for failing to meet the requirements of the exchange.

Which one of the following statements about foreign investments is true?

The Securities Act of 1933 deals mostly with primary markets.

The minimum initial margin requirement for both long and short positions is set by the Federal Reserve Board and currently is 50%.

Describe the initial public offering (IPO)process and explain the role of the underwriter, the Securities and Exchange Commission (SEC), and the red herring.

In recent years, trading in secondary markets has increasingly become a function of

Options contracts on stocks may

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