 |
| 1 | |
The day-to-day trading at the NYSE or NASDAQ markets, is comprised of: |
| | A) | just "market orders." |
| | B) | "secondary market" trades. |
| | C) | "primary market" trades. |
| | D) | just trades of "shelf registered" securities. |
| | E) | just "limit orders." |
|
|
|
| 2 | |
Jane purchased 100 shares of ABC stock at price of $44. One year later, she received a $1 per share dividend payment, and ABC's stock price had fallen to $41. What was her one-year return on this stock? |
| | A) | -6.82% |
| | B) | 2.27% |
| | C) | 9.09% |
| | D) | -4.55% |
| | E) | -7.32% |
|
|
|
| 3 | |
If the stock market is "semistrong form" efficient, but not "strong form" efficient, then: |
| | A) | the stock market cannot also be "weak form" efficient. |
| | B) | stock prices do not reflect the information content of historical stock prices. |
| | C) | stock prices very quickly reflect all new, publicly available information. |
| | D) | stock prices very quickly reflect all new information, whether publicly available or privately held. |
| | E) | (a) and (b) |
|
|
|
| 4 | |
Legally, the holders of common stock are in a/an _______________ with the issuing corporation. |
| | A) | debtor's position |
| | B) | ownership position |
| | C) | creditor's position |
| | D) | bondholder's position |
| | E) | (c) and (d) |
|
|
|
| 5 | |
The two basic types of corporate stock are: |
| | A) | priority and subordinated |
| | B) | preferred and subordinated |
| | C) | first lien and subordinated |
| | D) | debt and equity |
| | E) | common and preferred |
|
|
|
| 6 | |
Jack bought 100 shares of Google stock at $290 per share. At the end of one year, Google was priced at $265 per share. No dividends were paid. What was Jack's one-year return? |
| | A) | 0 |
| | B) | $25 |
| | C) | -8.62% |
| | D) | 1.094% |
| | E) | -9.43% |
|
|
|
| 7 | |
The __________________ feature of common stock means that losses of stockholders are limited to the amount of their original investment. |
| | A) | limited liability |
| | B) | dual-class |
| | C) | cumulative |
| | D) | residual |
| | E) | proxy |
|
|
|
| 8 | |
A/an __________________ enables stockholders to vote in an annual stockholders' meeting by absentee ballot, or to authorize others to vote on their behalf. |
| | A) | preferred stock |
| | B) | convertible bond |
| | C) | participating stock |
| | D) | proxy |
| | E) | cumulative preferred stock |
|
|
|
| 9 | |
With _____________________ preferred stock, the preferred stockholders could receive dividend payments in excess of the regular, stated amount. |
| | A) | participating |
| | B) | cumulative |
| | C) | non-cumulative |
| | D) | residual |
| | E) | proxy |
|
|
|
| 10 | |
One kind of primary market stock sale is a __________________ offering, where the issuing firm already has existing shares outstanding and trading in the secondary market. |
| | A) | proxy |
| | B) | syndicated |
| | C) | preemptive rights |
| | D) | participating |
| | E) | seasoned |
|
|
|
| 11 | |
Sue owns 2000 shares of the 20 million outstanding common shares of ABC Corp. ABC stockholders have preemptive rights. Now, ABC decides to sell 2 million new common shares through a rights offering. How many rights will Sue receive? |
| | A) | 200 |
| | B) | 0.20 |
| | C) | 0.10 |
| | D) | 20 |
| | E) | 2000 |
|
|
|
| 12 | |
Prior to the public sale of stock, the _____________________ will be distributed to potential buyers. It is a preliminary version of the prospectus. |
| | A) | shelf registration statement |
| | B) | rights offering |
| | C) | red herring |
| | D) | official SEC registration statement |
| | E) | underwriter's syndication statement |
|
|
|
| 13 | |
Securities that are not traded on an organized exchange such as NYSE and AMEX are: |
| | A) | not eligible to be traded |
| | B) | referred to as "de-listed" securities |
| | C) | traded through the SEC |
| | D) | traded "over the counter" |
| | E) | cannot be purchased by individual investors |
|
|
|
| 14 | |
__________________________ is a computerized system that automatically matches orders between buyers and sellers, serving as an alternative to traditional market making and floor trading. |
| | A) | The NYSE |
| | B) | The AMEX |
| | C) | The Dow Jones Industrial Average |
| | D) | An electronic communication network (ECN) |
| | E) | An OTC |
|
|
|
| 15 | |
Which of the following is not a "value-weighted" index? |
| | A) | NYSE Composite Index |
| | B) | Dow-Jones Industrial Average |
| | C) | NASDAQ Composite Index |
| | D) | Standard & Poor's 500 Index |
| | E) | (b) and (c) |
|
|
|
| 16 | |
The ___________________ is certificate representing ownership of a foreign stock; it trades in the United States, in dollars. |
| | A) | preferred stock |
| | B) | convertible bond |
| | C) | drawing right |
| | D) | SRO |
| | E) | ADR |
|
|
|
| 17 | |
_____________________ established the SEC as the main governmental agency responsible for oversight of secondary stock markets. |
| | A) | Regulation FD |
| | B) | The Securities Exchange Act of 1934 |
| | C) | The Federal Reserve Act of 1913 |
| | D) | The Glass Steagall Act of 1933 |
| | E) | The Securities Act of 1933 |
|
|
|
| 18 | |
Suppose we employ a "price-weighted" methodology to construct and track a two-stock index based on Stocks X and Y. Stock X has an initial price of $10, and there are 10 million shares outstanding. Stock Y has an initial price of $20, and there are 40 million shares outstanding. One month later, Stock X's price is $12 and Stock Y's price is still $20. The shares outstanding remain the same. What is the percentage change in our price-weighted index, over the one-month period? |
| | A) | 0 |
| | B) | 20.00% |
| | C) | 6.67% |
| | D) | 2.22% |
| | E) | 1.02% |
|
|
|
| 19 | |
Suppose we employ a "value-weighted" methodology to construct and track a two-stock index based on Stocks X and Y. Stock X has an initial price of $10, and there are 10 million shares outstanding. Stock Y has an initial price of $20, and there are 40 million shares outstanding. One month later, Stock X's price is $12 and Stock Y's price is still $20. The shares outstanding remain the same. What is the percentage change in our value-weighted index, over the one-month period? |
| | A) | 0 |
| | B) | 20.00% |
| | C) | 6.67% |
| | D) | 2.22% |
| | E) | 1.02% |
|
|
|
| 20 | |
Some corporations are organized as __________________ firms, meaning that the firm has two classes of common stock outstanding, each having different voting rights for the investors. |
| | A) | limited liability |
| | B) | cumulative voting |
| | C) | dual-class |
| | D) | residual claim |
| | E) | proxy |
|
|
.