Question 1

An investor placing a market order with a broker agrees to buy or sell a stock immediately at the best price available.

Accepted Answer

A) True 
 B)False

Question 2

The purpose of the SEC's circuit breakers rule is to:

Accepted Answer

A)  prevent market disruption caused by a communication malfunction.
B)  halt trading for a short time following a dramatic drop in stock prices.
C)  allow floor traders to specialize in trading the securities of specific industries.
D)  prevent individuals from profiting from information not available to the general public.

Question 3

How do investment bankers generate revenues for their firms?

Accepted Answer

A)  They invest their own funds,or the funds of others,in mutual funds and commodities.
B)  They earn commissions by managing the investments of insurance companies and mutual funds.
C)  They buy,at a discount,the entire issue of a new security and then sell the issue to investors at full price.
D)  They receive consulting revenues from the advice they offer the Securities and Exchange Commission.

Question 4

The maturity date of a bond refers to the date on which the interest payment is due to be paid.

Accepted Answer

A) True 
 B)False

Question 5

Tyrone owns shares of ________ stock in New Jersey Power.His stock certificate states that any missed dividends will be paid prior to any future common stock dividend payments.

Accepted Answer

A)  classified common
B)  preemptive common
C)  convertible preferred
D)  cumulative preferred

Question 6

In the securities markets,capital gains take place when:

Accepted Answer

A)  the value of the Dow Jones Industrial Average appreciates.
B)  a security sells for more than the original purchase price.
C)  additional investors buy stock in an existing corporation.
D)  stockholders profit from the firm's use of leverage.

Question 7

From a risk standpoint,stocks are considered the riskiest investments,followed by mutual funds,preferred stock,and ETFs.Bonds represent a lower risk investment.

Accepted Answer

A) True 
 B)False

Question 8

________ represent the best way for investors to have their investments managed by a trained specialist for a fee.

Accepted Answer

A)  Individual stocks
B)  Mutual funds
C)  Corporate bonds
D)  Government bonds

Question 9

Idle Time Gaming,Inc has reached a point in its life where it needs several million dollars in order to expand and follow its strategic plan.In negotiations with the investment banker,they agree to issue 40 million shares of common stock,at $22/share.If the Investment Banker's fee for underwriting the total sale is 6.82%,what is the discounted price that the investment bank is willing to pay Idle Time for the shares?

Accepted Answer

A)  Approximately $300,000,000
B)  Approximately $820,000,000
C)  Approximately $880,000,000
D)  Approximately $88,000

Question 10

An investor places a ________ order with a broker to sell a stock at the best price available at that time.

Accepted Answer

A)  discretionary
B)  market
C)  limit
D)  leveraged

Question 11

The first step in any investment program is to analyze factors such as desired income,cash requirements,and your tolerance for risk.

Accepted Answer

A) True 
 B)False

Question 12

Corporations sell a new issuance of securities in the Primary Market.

Accepted Answer

A) True 
 B)False

Question 13

A stock split immediately increases the value of an investor's holdings.

Accepted Answer

A) True 
 B)False

Question 14

Issuing stock is considered equity financing.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following measures how quickly an investor has access to his/her invested funds,if they are needed?

Accepted Answer

A)  risk
B)  tax consequences
C)  yield
D)  liquidity

Question 16

We calculate the mutual fund's NAV (Net Asset Value)by dividing the total market value of the fund,by the number of shared outstanding.

Accepted Answer

A) True 
 B)False

Question 17

Although the interest rate is fixed when the bond is issued,the interest rate that one firm must pay compared to another may vary depending upon risk factors such as the reputation of the firm.

Accepted Answer

A) True 
 B)False

Question 18

An initial public offering (IPO)represents the first time a corporation's stock is offered and sold to persons outside of the company.

Accepted Answer

A) True 
 B)False

Question 19

Corporations benefit from securities markets primarily by:

Accepted Answer

A)  creating an efficient mechanism to invest in stocks and bonds.
B)  obtaining the capital they need to finance their operations.
C)  securing memberships on various stock exchanges.
D)  participating in the mutual funds of investment bankers.

Question 20

The first step in establishing an investment strategy is the:

Accepted Answer

A)  determination of the investor's objectives.
B)  selection of the type of security.
C)  selection of a stock broker.
D)  timing of the market's fluctuations.

Exam 19: Using Securities Markets for Financing and Investing Opportunities

An investor placing a market order with a broker agrees to buy or sell a stock immediately at the best price available.

Correct Answer
verified

The maturity date of a bond refers to the date on which the interest payment is due to be paid.

Correct Answer
verified

In the securities markets,capital gains take place when:

Correct Answer
verified

Corporations benefit from securities markets primarily by:

Correct Answer
verified

An initial public offering (IPO)represents the first time a corporation's stock is offered and sold to persons outside of the company.

Correct Answer
verified

Corporations sell a new issuance of securities in the Primary Market.

Correct Answer
verified

From a risk standpoint,stocks are considered the riskiest investments,followed by mutual funds,preferred stock,and ETFs.Bonds represent a lower risk investment.

Correct Answer
verified

Issuing stock is considered equity financing.

Correct Answer
verified

Correct Answer
verified

Which of the following measures how quickly an investor has access to his/her invested funds,if they are needed?

Correct Answer
verified

How do investment bankers generate revenues for their firms?

Correct Answer
verified

Tyrone owns shares of ________ stock in New Jersey Power.His stock certificate states that any missed dividends will be paid prior to any future common stock dividend payments.

Correct Answer
verified

Although the interest rate is fixed when the bond is issued,the interest rate that one firm must pay compared to another may vary depending upon risk factors such as the reputation of the firm.

Correct Answer
verified

The first step in any investment program is to analyze factors such as desired income,cash requirements,and your tolerance for risk.

Correct Answer
verified

________ represent the best way for investors to have their investments managed by a trained specialist for a fee.

Correct Answer
verified

We calculate the mutual fund's NAV (Net Asset Value)by dividing the total market value of the fund,by the number of shared outstanding.

Correct Answer
verified

The purpose of the SEC's circuit breakers rule is to:

Correct Answer
verified

A stock split immediately increases the value of an investor's holdings.

Correct Answer
verified

An investor places a ________ order with a broker to sell a stock at the best price available at that time.

Correct Answer
verified

The first step in establishing an investment strategy is the:

Correct Answer
verified

Exam 19: Using Securities Markets for Financing and Investing Opportunities

An investor placing a market order with a broker agrees to buy or sell a stock immediately at the best price available.

Correct AnswerverifiedShow Answer

The maturity date of a bond refers to the date on which the interest payment is due to be paid.

Correct AnswerverifiedShow Answer

In the securities markets,capital gains take place when:

Correct AnswerverifiedShow Answer

Corporations benefit from securities markets primarily by:

Correct AnswerverifiedShow Answer

An initial public offering (IPO)represents the first time a corporation's stock is offered and sold to persons outside of the company.

Correct AnswerverifiedShow Answer

Corporations sell a new issuance of securities in the Primary Market.

Correct AnswerverifiedShow Answer

From a risk standpoint,stocks are considered the riskiest investments,followed by mutual funds,preferred stock,and ETFs.Bonds represent a lower risk investment.

Correct AnswerverifiedShow Answer

Issuing stock is considered equity financing.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following measures how quickly an investor has access to his/her invested funds,if they are needed?

Correct AnswerverifiedShow Answer

How do investment bankers generate revenues for their firms?

Correct AnswerverifiedShow Answer

Tyrone owns shares of ________ stock in New Jersey Power.His stock certificate states that any missed dividends will be paid prior to any future common stock dividend payments.

Correct AnswerverifiedShow Answer

Although the interest rate is fixed when the bond is issued,the interest rate that one firm must pay compared to another may vary depending upon risk factors such as the reputation of the firm.

Correct AnswerverifiedShow Answer

The first step in any investment program is to analyze factors such as desired income,cash requirements,and your tolerance for risk.

Correct AnswerverifiedShow Answer

________ represent the best way for investors to have their investments managed by a trained specialist for a fee.

Correct AnswerverifiedShow Answer

We calculate the mutual fund's NAV (Net Asset Value)by dividing the total market value of the fund,by the number of shared outstanding.

Correct AnswerverifiedShow Answer

The purpose of the SEC's circuit breakers rule is to:

Correct AnswerverifiedShow Answer

A stock split immediately increases the value of an investor's holdings.

Correct AnswerverifiedShow Answer

An investor places a ________ order with a broker to sell a stock at the best price available at that time.

Correct AnswerverifiedShow Answer

The first step in establishing an investment strategy is the:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified