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Exam 19: Using Securities Markets for Financing and Investing Opportunities

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Question 31

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A bond sold with a sinking fund provision requires the firm to allow a stockholder to exchange his/her bond for a specified number of shares of common stock.

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Question 32

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Many stock analysts believe that program trading decreases the volatility of stock market prices.

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Question 33

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Realizing that Mississippi Industries stock currently sells for $35 a share,Juanita directed her broker to buy 100 shares if and when the price dropped to $33.Juanita placed a ________ order with her broker.

Issuing bonds to obtain long-term funds legally compels a firm to pay regular ________ payments and repay the ________ at the maturity date.

A stock exchange provides a marketplace where the public can directly buy and sell securities without the help of intermediaries.

To reduce market volatility,________ require that a key computer is turned off so that program trading must be done 'by hand' rather than automatically by computer.

Last week,Danielle purchased 200 shares of High Tech Heaven,Inc on margin for $50 per share.This week,the price of High Tech Heaven's shares dropped by $10 per share due to a poor profit outlook.Danielle should anticipate:

Mark impresses his friends by stating that he just cast four votes in the election of the board of directors of Microsoft,indicating that Mark owns __________ stock in Microsoft.

Which of the following organizations provides an assessment of the relative level of risk of a particular firm's bond issue?

By buying a ________ bond,investors will have an option to exchange their bond for shares of common stock in the company at a future date.

Interest rates vary with changes in the state of the economy.

After retirement,Hector began a search for a low-risk investment.He should consider buying a secured bond of a major corporation.

Buying on margin means you are borrowing part of the value of the stock purchase from the brokerage firm.

Bond classifications include,but are not limited to Corporate bonds,T-bills,Treasury bonds,Treasury notes,and Municipal bonds.

Private investors benefit from securities markets primarily by:

Discuss the role of investment bankers in the securities markets.

Program trading refers to computer trading software that automatically sells stocks when their price dips to a predetermined level.

Investment bankers assist in the issuing and selling of new securities.

A bull market occurs when overall stock prices increase.

Which of the following describes a mutual fund that charges no commission to buy or sell its shares?