投资学题库Chap003.docx

投资学题库Chap003.docx

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投资学题库Chap003

投资学题库Chap003

Chapter03

HowSecuritiesAreTraded

MultipleChoiceQuestions

1.

Thetradingofstockthatwaspreviouslyissuedtakesplace 

A. 

inthesecondarymarket.

B. 

intheprimarymarket.

C. 

usuallywiththeassistanceofaninvestmentbanker.

D. 

inthesecondaryandprimarymarkets.

2.

Apurchaseofanewissueofstocktakesplace 

A. 

inthesecondarymarket.

B. 

intheprimarymarket.

C. 

usuallywiththeassistanceofaninvestmentbanker.

D. 

inthesecondaryandprimarymarkets.

E. 

intheprimarymarketandusuallywiththeassistanceofaninvestmentbanker.

3.

Firmsraisecapitalbyissuingstock 

A. 

inthesecondarymarket.

B. 

intheprimarymarket.

C. 

tounwaryinvestors.

D. 

onlyondayswhenthemarketisup.

4.

Whichofthefollowingstatementsregardingthespecialistaretrue?

A. 

Specialistsmaintainabooklistingoutstandingunexecutedlimitorders.

B. 

Specialistsearnincomefromcommissionsandspreadsinstockprices.

C. 

Specialistsstandreadytotradeatquotedbidandaskprices.

D. 

Specialistscannottradeintheirownaccounts.

E. 

Specialistsmaintainabooklistingoutstandingunexecutedlimitorders,earnincomefromcommissionsandspreadsinstockprices,andstandreadytotradeatquotedbidandaskprices.

5.

Investmentbankers 

A. 

actasintermediariesbetweenissuersofstocksandinvestors.

B. 

actasadvisorstocompaniesinhelpingthemanalyzetheirfinancialneedsandfindbuyersfornewlyissuedsecurities.

C. 

acceptdepositsfromsaversandlendthemouttocompanies.

D. 

actasintermediariesbetweenissuersofstocksandinvestorsandactasadvisorstocompaniesinhelpingthemanalyzetheirfinancialneedsandfindbuyersfornewlyissuedsecurities.

6.

Ina"firmcommitment,"theinvestmentbanker 

A. 

buysthestockfromthecompanyandresellstheissuetothepublic.

B. 

agreestohelpthefirmsellthestockatafavorableprice.

C. 

findsthebestmarketingarrangementfortheinvestmentbankingfirm.

D. 

agreestohelpthefirmsellthestockatafavorablepriceandfindsthebestmarketingarrangementfortheinvestmentbankingfirm.

7.

Thesecondarymarketconsistsof 

A. 

transactionsontheAMEX.

B. 

transactionsintheOTCmarket.

C. 

transactionsthroughtheinvestmentbanker.

D. 

transactionsontheAMEXandintheOTCmarket.

E. 

transactionsontheAMEX,throughtheinvestmentbanker,andintheOTCmarket.

8.

Initialmarginrequirementsaredeterminedby 

A. 

theSecuritiesandExchangeCommission.

B. 

theFederalReserveSystem.

C. 

theNewYorkStockExchange.

D. 

theFederalReserveSystemandtheNewYorkStockExchange.

9.

YoupurchasedJNJstockat$50pershare.Thestockiscurrentlysellingat$65.Yourgainsmaybeprotectedbyplacinga 

A. 

stop-buyorder.

B. 

limit-buyorder.

C. 

marketorder.

D. 

limit-sellorder.

E. 

Noneoftheoptions

10.

YousoldJCPstockshortat$80pershare.Yourlossescouldbeminimizedbyplacinga 

A. 

limit-sellorder.

B. 

limit-buyorder.

C. 

stop-buyorder.

D. 

day-order.

E. 

Noneoftheoptions

11.

Whichoneofthefollowingstatementsregardingordersisfalse?

A. 

Amarketorderissimplyanordertobuyorsellastockimmediatelyattheprevailingmarketprice.

B. 

Alimit-sellorderiswhereinvestorsspecifypricesatwhichtheyarewillingtosellasecurity.

C. 

IfstockABCissellingat$50,alimit-buyordermayinstructthebrokertobuythestockifandwhenthesharepricefallsbelow$45.

D. 

Amarketorderisanordertobuyorsellastockonaspecificexchange（market）.

12.

Restrictionsontradinginvolvinginsiderinformationapplytothefollowingexcept 

A. 

corporateofficers.

B. 

corporatedirectors.

C. 

majorstockholders.

D. 

Alloftheoptionsaresubjecttoinsidertradingrestrictions.

E. 

Noneoftheoptionsissubjecttoinsidertradingrestrictions.

13.

Thecostofbuyingandsellingastockconsistsof 

A. 

broker'scommissions.

B. 

dealer'sbid-askedspread.

C. 

apriceconcessionaninvestormaybeforcedtomake.

D. 

broker'scommissionsanddealer'sbid-askedspread.

E. 

broker'scommissions,dealer'sbid-askedspread,andapriceconcessionaninvestormaybeforcedtomake.

14.

Assumeyoupurchased200sharesofGEcommonstockonmarginat$70persharefromyourbroker.Iftheinitialmarginis55%,howmuchdidyouborrowfromthebroker?

A. 

$6,000

B. 

$4,000

C. 

$7,700

D. 

$7,000

E. 

$6,300

15.

Yousoldshort200sharesofcommonstockat$60pershare.Theinitialmarginis60%.Yourinitialinvestmentwas 

A. 

$4,800.

B. 

$12,000.

C. 

$5,600.

D. 

$7,200.

16.

Youpurchased100sharesofIBMcommonstockonmarginat$70pershare.Assumetheinitialmarginis50%andthemaintenancemarginis30%.Belowwhatstockpricelevelwouldyougetamargincall?

Assumethestockpaysnodividend;ignoreinterestonmargin. 

A. 

$21

B. 

$50

C. 

$49

D. 

$80

17.

Youpurchased100sharesofcommonstockonmarginat$45pershare.Assumetheinitialmarginis50%andthestockpaysnodividend.Whatwouldthemaintenancemarginbeifamargincallismadeatastockpriceof$30?

Ignoreinterestonmargin. 

A. 

0.33

B. 

0.55

C. 

0.43

D. 

0.23

E. 

0.25

18.

Youpurchased300sharesofcommonstockonmarginfor$60pershare.Theinitialmarginis60%andthestockpaysnodividend.Whatwouldyourrateofreturnbeifyousellthestockat$45pershare?

Ignoreinterestonmargin. 

A. 

25.00%

B. 

-33.33%

C. 

44.31%

D. 

-41.67%

E. 

-54.22%

19.

Assumeyousellshort100sharesofcommonstockat$45pershare,withinitialmarginat50%.Whatwouldbeyourrateofreturnifyourepurchasethestockat$40pershare?

Thestockpaidnodividendsduringtheperiod,andyoudidnotremoveanymoneyfromtheaccountbeforemakingtheoffsettingtransaction. 

A. 

20.03%

B. 

25.67%

C. 

22.22%

D. 

77.46%

20.

Yousoldshort300sharesofcommonstockat$55pershare.Theinitialmarginis60%.Atwhatstockpricewouldyoureceiveamargincallifthemaintenancemarginis35%?

A. 

$51.00

B. 

$65.18

C. 

$35.22

D. 

$40.36

21.

Assumeyousoldshort100sharesofcommonstockat$50pershare.Theinitialmarginis60%.Whatwouldbethemaintenancemarginifamargincallismadeatastockpriceof$60?

A. 

40%

B. 

33%

C. 

35%

D. 

25%

22.

Specialistsonstockexchangesperformwhichofthefollowingfunctions?

A. 

Actasdealersintheirownaccounts.

B. 

Analyzethesecuritiesinwhichtheyspecialize.

C. 

Provideliquiditytothemarket.

D. 

Actasdealersintheirownaccountsandanalyzethesecuritiesinwhichtheyspecialize.

E. 

Actasdealersintheirownaccountsandprovideliquiditytothemarket.

23.

Sharesforshorttransactions 

A. 

areusuallyborrowedfromotherbrokers.

B. 

aretypicallysharesheldbytheshortseller'sbrokerinstreetname.

C. 

areborrowedfromcommercialbanks.

D. 

aretypicallysharesheldbytheshortseller'sbrokerinstreetnameandareborrowedfromcommercialbanks.

24.

Whichofthefollowingordersismostusefultoshortsellerswhowanttolimittheirpotentiallosses?

A. 

Limitorder

B. 

Discretionaryorder

C. 

Limit-lossorder

D. 

Stop-buyorder

25.

Whichofthefollowingordersinstructsthebrokertobuyatthecurrentmarketprice?

A. 

Limitorder

B. 

Discretionaryorder

C. 

Limit-lossorder

D. 

Stop-buyorder

E. 

Marketorder

26.

Whichofthefollowingordersinstructsthebrokertobuyatorbelowaspecifiedprice?

A. 

Limit-lossorder

B. 

Discretionaryorder

C. 

Limit-buyorder

D. 

Stop-buyorder

E. 

Marketorder

27.

Whichofthefollowingordersinstructsthebrokertosellatorbelowaspecifiedprice?

A. 

Limit-sellorder

B. 

Stop-loss

C. 

Limit-buyorder

D. 

Stop-buyorder

E. 

Marketorder

28.

Whichofthefollowingordersinstructsthebrokertosellatoraboveaspecifiedprice?

A. 

Limit-buyorder

B. 

Discretionaryorder

C. 

Limit-sellorder

D. 

Stop-buyorder

E. 

Marketorder

29.

Whichofthefollowingordersinstructsthebrokertobuyatoraboveaspecifiedprice?

A. 

Limit-buyorder

B. 

Discretionaryorder

C. 

Limit-sellorder

D. 

Stop-buyorder

E. 

Marketorder

30.

Shelfregistration 

A. 

isawayofplacingissuesintheprimarymarket.

B. 

allowsfirmstoregistersecuritiesforsaleoveratwo-yearperiod.

C. 

increasestransactioncoststotheissuingfirm.

D. 

isawayofplacingissuesintheprimarymarketandallowsfirmstoregistersecuritiesforsaleoveratwo-yearperiod.