The Amex has had particular success through pioneering the trading of: Homework Help

The Amex has had particular success through pioneering the trading of:

a. Currency futures

b. Corporate futures

c. Technology start up companies

d. Exchange traded funds

The stock of a company in financial distress, such as Kmart, will commonly be removed from trading, when this occurs the stock is likely to trade

a. Only through specialist

b. Alternative trading system

c. Over the counter

d. By direct placement

ECNs have captured a significant stock index share of NASDAQ trading by offering aIDitional trading alternatives for investors including

a. Small block trades

b. After hours trading

c. In house trading

d. Depository receipts

The DJIA is unusual among stock indexes in that it utilizes a price-weighted series, critics of this calculation is

a. Is too narrow a basket of stocks

b. Does not account for dividends

c. Is arbitrary

d. Has a bias against growth stock

When institutional investors such as mutual fund managers, compare their performance to the market, their preferences is to use the

a. Standard and poor’s 500

b. DJIA

c. Nasdaq composite index

d. Wilshire 5000 index

One of the primary factors driving changes in securities markets was the passage of the securities act amendment 75. This legalization called for creation?

a. Regulatory oversight board

b. 24 hour trading

c. National market system

d. Global trading network

There are many reasons an investor might choose to buy stocks through dividend reinvestments plan, a particularly favorable benefit is that these plan result in a _________purchase strategy

a. Low risk

b. Dollar cost averaging

c. Widely diversified

d. Fair market value

Which statement is TRUE regarding discount brokers?

a. The no. Of on-line discount brokers is the largest type of discount broker

b. Discount brokers only execute orders on stock transaction

c. Discount brokers may offer little investment advice.

d. All the above

Since Nasdaq is a dealer market, rather than an auction market its market makers are NOT required to:

a. Post prices they are prepared to buy and sell at

b. Settle trades as promptly as exchanges members

c. Operate through a computerized trading network

d. Execute each order at the best available market price

You have just placed a sell stop order for 200 shares of IBM at $72. From this info, one can assume it is likely that IBM share are:

a. Currently trending higher than $72

b. Trading down today

c. About to split

d. About to pay a dividend

Among the sec’s many responsibilities in administering securities laws is to ensure that investment companies and investment advisors have

a. Informed the public of their investment strategies

b. Ensured the products they sell are suitable for all investors

c. Registered and disclosed certain information

d. Completed minimum educational requirements

In response to the market crash of 87 the NYSE instituted several measure to reduce market volatilely. What happens as a result of these circuit brokers if the DJIA declines 20% in a single day based on average closing values for the prior month?

a. Trading will halt for a certain time period

b. Program trading is terminated indefinitely

c. Arbitrage orders can only be executed on a down tick

d. The exchange will close for the rest of the day

You have a dispute with your broker over a trade, you place a limit order, but it was executed as a market order and you didn’t get the price you wanted, your first action to resolve this dispute is

a. File a lawsuit

b. Binding arbitration

c. Mediator

d. Written clam with the brokerage firm

When an investor uses a margin account, cash has_______loan value, while stock securities have a ________loan value

a. 50%, 50%

b. 100%, 100%

c. 50%, 100%

d. 100%, 50%

An investor bought 100 shares of stock priced @ $80 per share using a new margin account, had 50% initial margin requirement. His brokerage firm uses 30% maintenance margin. What share price will the investor are required to post more margins. Ignore the effects of commissions on the trade and any subsequent interest charges in the margin account.

a. $48.33

b. 53.22

c. 57.14

d. 60.88

In a short sale, the investor is selling shares that have been

a. Previously purchased

b. Borrowed

c. Newly issued

d. Overvalued

Investment bankers are compensated by

a. Underwriting spread

b. Commissions paid by the buyers of the security

c. Commission paid by the sellers of the security

d. Guaranteed investments contracts

Investment bankers diversify their risks with a new securities offering by:

a. Forming an underwriting syndicate

b. Putting disclaimers in the prospectus

c. Holding back a portion of proceeds

d. Pricing the offering below fair value

The single factor that most distinguishes the NASDAQ, as compared to the NYSE and Amex, is the fact that it:

a. Is not for profit organization

b. Handles majority of IPOs

c. Has no trading floor

d. Does not use bids/ask prices