 |
1 | |
A prospectus provides detailed information about a firm's operations, plans, and financial position. |
| | A) | True |
| | B) | False |
|
|
2 | |
An order to sell stock at the current price is called a market order. |
| | A) | True |
| | B) | False |
|
|
3 | |
An order to buy stock but only at a set price, or less, is called a limit order. |
| | A) | True |
| | B) | False |
|
|
4 | |
The direct trading of exchange-listed securities between investors is referred to as the third market. |
| | A) | True |
| | B) | False |
|
|
5 | |
When it comes to new security issues, the SEC: |
| | A) | analyzes the issuer's financial condition to ensure the firm is fiscally sound. |
| | B) | prepares a prospectus for the issue which must be distributed to all potential investors. |
| | C) | verifies that the stock is actually worth its offer price. |
| | D) | has no involvement whatsoever. |
| | E) | ensures that all disclosure rules have been followed. |
|
|
6 | |
The position on the exchange floor where a specialist is located is called the specialist's: |
| | A) | post. |
| | B) | counter. |
| | C) | block. |
| | D) | garage. |
| | E) | blue room. |
|
|
7 | |
Which of the following statements are correct?- Buy and sell orders placed by individuals on ECNs are displayed on NASDAQ.
- Inside quotes are the lowest bid prices and the highest ask prices.
- Level II quotes display all the bid and ask prices posted by market makers.
- ECNs are regional dealer markets.
|
| | A) | I and III only |
| | B) | II and IV only |
| | C) | III and IV only |
| | D) | I, II, and III only |
| | E) | II, III, and IV only |
|
|
8 | |
In a price-weighted index the stocks are held in proportion to the _____ and in a value- weighted index the stocks are held in proportion to the _____. |
| | A) | number of shares outstanding; total company market values |
| | B) | total company market values; number of shares outstanding |
| | C) | share prices; number of shares outstanding |
| | D) | number of shares outstanding; share prices |
| | E) | share prices; total company market values |
|
|
9 | |
A price-weighted index consists of the following four stocks. The current index divisor is 3.39. What will the new divisor be if stock D does a 3-for-2 stock split?| Stock | Share Price | | A | $31 | | B | $18 | | C | $26 | | D | $54 |
|
| | A) | 2.67 |
| | B) | 2.74 |
| | C) | 2.83 |
| | D) | 2.89 |
| | E) | 2.92 |
|
|
10 | |
You want to create a value-weighted index of the following three stocks. If you set the beginning index equal to 100, what will the ending index value be?| | Shares | Beginning | Ending | | Stock | Outstanding | Share Price | Share Price | | Alpha | 2,000 | $22 | $23 | | Beta | 5,000 | $36 | $35 | | Gamma | 3,000 | $17 | $19 |
|
| | A) | 96.87 |
| | B) | 97.99 |
| | C) | 98.91 |
| | D) | 101.09 |
| | E) | 102.01 |
|
|
11 | |
You want to create a price-weighted index of the following three stocks. If you set the beginning index equal to 100, what will the ending index value be?| | Shares | Beginning | Ending | | Stock | Outstanding | Share Price | Share Price | | Alpha | 2,000 | $22 | $23 | | Beta | 5,000 | $36 | $35 | | Gamma | 3,000 | $17 | $19 |
|
| | A) | 101.38 |
| | B) | 102.14 |
| | C) | 102.67 |
| | D) | 103.09 |
| | E) | 103.13 |
|