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Multiple Choice Quiz
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1.
Market orders are buy or sell order that will be executed immediately at _______________ prices
A)the best
B)current market
C)the highest
D)the lowest
2.
Trading of exiting stock take place in the _______________.
A)secondary market
B)third market
C)forth market
D)All of the above.
3.
The specialist on an exchange is required to maintain _______________ market.
A)an equilibrium
B)an efficient
C)a just and smooth
D)a fair and orderly
4.
You purchased 100 shares of AAA common stock on margin for $40 per share. The initial margin is 60% and the stock pays no dividend. Your rate of return would be _______________ if you sell the stock at $43 per share.
A)-12.5%
B)-7.5%
C)7.5%
D)12.5%
5.
The _______________ price is the price a dealer is willing to purchase a security.
A)bid
B)ask
C)limit
D)offering
6.
You purchased ABC stock at $50 per share. The stock is currently selling at $49. Your potential loss could be reduced by placing a _______________.
A)limit-buy order
B)limit-sell order
C)market order
D)stop-loss order
7.
The Nasdaq Stock Market is a _______________.
A)primary market
B)secondary market
C)dealer market
D)Both B and C above.
8.
The third market refers to trading of _______________.
A)exchange-listed stocks on the OTC market
B)OTC stocks on the exchange
C)exchange-listed stocks on the global market
D)OTC stocks on the global market
9.
You purchased 400 shares of XYZ common stock on margin at $20 per share. Assume the initial margin is 60% and the maintenance margin is 30%. You would get a margin call if the stock price is below _______________. Assume the stock pays no dividend and ignore interest on margin.
A)$15.71
B)$11.43
C)$13.57
D)$10.14
10.
You sold short 200 shares of XYZ common stock at $40 per share with an initial margin of 60%. Your initial investment was _______________.
A)$3,200
B)$4,800
C)$6,000
D)$8,000
11.
Google's IPO in 2004 was unique because its offering price was determined by the _______________ method.
A)first come, first served
B)auction
C)supply and demand
D)European
12.
Electronic Communication Networks are private computer networks that link _______________.
A)buyers and sellers
B)different stock exchanges
C)different stock brokers
D)global stock exchanges
13.
The New York Stock Exchange is a _______________ market.
A)dealer
B)network
C)broker
D)specialist
14.
In buying on margin, the margin is the _______________ of the investor's account.
A)loan amount
B)equity value
C)total value
D)None of the above.
15.
In a _______________, the investment bankers purchase securities from the issuing company and then resell to the public.
A)best-efforts agreement
B)total package agreement
C)firm commitment
D)private placement





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