投资学题库Chap003.docx

1、投资学题库Chap003投资学题库Chap003Chapter 03How Securities Are TradedMultiple Choice Questions1.The trading of stock that was previously issued takes placeA.in the secondary market.B.in the primary market.C.usually with the assistance of an investment banker.D.in the secondary and primary markets.2.A purchase

2、 of a new issue of stock takes placeA.in the secondary market.B.in the primary market.C.usually with the assistance of an investment banker.D.in the secondary and primary markets.E.in the primary market and usually with the assistance of an investment banker.3.Firms raise capital by issuing stockA.i

3、n the secondary market.B.in the primary market.C.to unwary investors.D.only on days when the market is up.4.Which of the following statements regarding the specialist are true?A.Specialists maintain a book listing outstanding unexecuted limit orders.B.Specialists earn income from commissions and spr

4、eads in stock prices.C.Specialists stand ready to trade at quoted bid and ask prices.D.Specialists cannot trade in their own accounts.E.Specialists maintain a book listing outstanding unexecuted limit orders, earn income from commissions and spreads in stock prices, and stand ready to trade at quote

5、d bid and ask prices.5.Investment bankersA.act as intermediaries between issuers of stocks and investors.B.act as advisors to companies in helping them analyze their financial needs and find buyers for newly issued securities.C.accept deposits from savers and lend them out to companies.D.act as inte

6、rmediaries between issuers of stocks and investors and act as advisors to companies in helping them analyze their financial needs and find buyers for newly issued securities.6.In a firm commitment, the investment bankerA.buys the stock from the company and resells the issue to the public.B.agrees to

7、 help the firm sell the stock at a favorable price.C.finds the best marketing arrangement for the investment banking firm.D.agrees to help the firm sell the stock at a favorable price and finds the best marketing arrangement for the investment banking firm.7.The secondary market consists ofA.transac

8、tions on the AMEX.B.transactions in the OTC market.C.transactions through the investment banker.D.transactions on the AMEX and in the OTC market.E.transactions on the AMEX, through the investment banker, and in the OTC market.8.Initial margin requirements are determined byA.the Securities and Exchan

9、ge Commission.B.the Federal Reserve System.C.the New York Stock Exchange.D.the Federal Reserve System and the New York Stock Exchange.9.You purchased JNJ stock at $50 per share. The stock is currently selling at $65. Your gains may be protected by placing aA.stop-buy order.B.limit-buy order.C.market

10、 order.D.limit-sell order.E.None of the options10.You sold JCP stock short at $80 per share. Your losses could be minimized by placing aA.limit-sell order.B.limit-buy order.C.stop-buy order.D.day-order.E.None of the options11.Which one of the following statements regarding orders is false?A.A market

11、 order is simply an order to buy or sell a stock immediately at the prevailing market price.B.A limit-sell order is where investors specify prices at which they are willing to sell a security.C.If stock ABC is selling at $50, a limit-buy order may instruct the broker to buy the stock if and when the

12、 share price falls below $45.D.A market order is an order to buy or sell a stock on a specific exchange (market).12.Restrictions on trading involving insider information apply to the following exceptA.corporate officers.B.corporate directors.C.major stockholders.D.All of the options are subject to i

13、nsider trading restrictions.E.None of the options is subject to insider trading restrictions.13.The cost of buying and selling a stock consists ofA.brokers commissions.B.dealers bid-asked spread.C.a price concession an investor may be forced to make.D.brokers commissions and dealers bid-asked spread

14、.E.brokers commissions, dealers bid-asked spread, and a price concession an investor may be forced to make.14.Assume you purchased 200 shares of GE common stock on margin at $70 per share from your broker. If the initial margin is 55%, how much did you borrow from the broker?A.$6,000B.$4,000C.$7,700

15、D.$7,000E.$6,30015.You sold short 200 shares of common stock at $60 per share. The initial margin is 60%. Your initial investment wasA.$4,800.B.$12,000.C.$5,600.D.$7,200.16.You purchased 100 shares of IBM common stock on margin at $70 per share. Assume the initial margin is 50% and the maintenance m

16、argin is 30%. Below what stock price level would you get a margin call? Assume the stock pays no dividend; ignore interest on margin.A.$21B.$50C.$49D.$8017.You purchased 100 shares of common stock on margin at $45 per share. Assume the initial margin is 50% and the stock pays no dividend. What would

17、 the maintenance margin be if a margin call is made at a stock price of $30? Ignore interest on margin.A.0.33B.0.55C.0.43D.0.23E.0.2518.You purchased 300 shares of common stock on margin for $60 per share. The initial margin is 60% and the stock pays no dividend. What would your rate of return be if

18、 you sell the stock at $45 per share? Ignore interest on margin.A.25.00%B.-33.33%C.44.31%D.-41.67%E.-54.22%19.Assume you sell short 100 shares of common stock at $45 per share, with initial margin at 50%. What would be your rate of return if you repurchase the stock at $40 per share? The stock paid

19、no dividends during the period, and you did not remove any money from the account before making the offsetting transaction.A.20.03%B.25.67%C.22.22%D.77.46%20.You sold short 300 shares of common stock at $55 per share. The initial margin is 60%. At what stock price would you receive a margin call if

20、the maintenance margin is 35%?A.$51.00B.$65.18C.$35.22D.$40.3621.Assume you sold short 100 shares of common stock at $50 per share. The initial margin is 60%. What would be the maintenance margin if a margin call is made at a stock price of $60?A.40%B.33%C.35%D.25%22.Specialists on stock exchanges p

21、erform which of the following functions?A.Act as dealers in their own accounts.B.Analyze the securities in which they specialize.C.Provide liquidity to the market.D.Act as dealers in their own accounts and analyze the securities in which they specialize.E.Act as dealers in their own accounts and pro

22、vide liquidity to the market.23.Shares for short transactionsA.are usually borrowed from other brokers.B.are typically shares held by the short sellers broker in street name.C.are borrowed from commercial banks.D.are typically shares held by the short sellers broker in street name and are borrowed f

23、rom commercial banks.24.Which of the following orders is most useful to short sellers who want to limit their potential losses?A.Limit orderB.Discretionary orderC.Limit-loss orderD.Stop-buy order25.Which of the following orders instructs the broker to buy at the current market price?A.Limit orderB.D

24、iscretionary orderC.Limit-loss orderD.Stop-buy orderE.Market order26.Which of the following orders instructs the broker to buy at or below a specified price?A.Limit-loss orderB.Discretionary orderC.Limit-buy orderD.Stop-buy orderE.Market order27.Which of the following orders instructs the broker to

25、sell at or below a specified price?A.Limit-sell orderB.Stop-lossC.Limit-buy orderD.Stop-buy orderE.Market order28.Which of the following orders instructs the broker to sell at or above a specified price?A.Limit-buy orderB.Discretionary orderC.Limit-sell orderD.Stop-buy orderE.Market order29.Which of

26、 the following orders instructs the broker to buy at or above a specified price?A.Limit-buy orderB.Discretionary orderC.Limit-sell orderD.Stop-buy orderE.Market order30.Shelf registrationA.is a way of placing issues in the primary market.B.allows firms to register securities for sale over a two-year period.C.increases transaction costs to the issuing firm.D.is a way of placing issues in the primary market and allows firms to register securities for sale over a two-year period.