ch5
Student: ___________________________________________________________________________
1.
Mary is buying 100 shares of stock from ALAT, Inc., as part of a new stock issue trading on the NYSE.
This sale is occurring in the _____ market.
A. primary
B. secondary
C. third
D. fourth
E. over-the-counter
2.
Peter is buying 500 shares of stock from George in the NASDAQ market. This transaction is occurring
in the _____ market.
A. primary
B. secondary
C. third
D. fourth
E. fifth
3.
The first time a firm sells shares of stock to the public is called a(n) _____ offering.
A. open-end
B. break-out
C. public service
D. initial public
E. initial trial
4.
An investment banking firm is a company that:
A. provides portfolio management services to a hedge fund.
B. manages either a mutual fund or a hedge fund.
C. transacts trades for shareholders.
D. oversees the investments in securities for a financial institution.
E. specializes in finding buyers for newly issued securities.
5.
When a firm assumes the risk of purchasing newly issued securities from a company and reselling those
shares to investors, the firm is said to be _____ the issue.
A. underwriting
B. capitalizing
C. securing
D. fixing
E. deploying
6.
A _____ commitment underwriting is an arrangement where the underwriter pays the issuer a stated
amount whether or not the underwriter can sell all of the shares in the issue to investors.
A. standby
B. fixed
C. variable
D. best efforts
E. clean sweep
1
7.
A best efforts underwriting is an arrangement where an investment banker:
A. buys all of a new issue of securities from the issuer and then attempts to resell those securities.
B. pays a fixed amount to the issuer and then tries to resell as many of the shares as possible.
C. tries to sell as many shares of a new issue as possible and only pays for the shares which are actually
sold to investors.
D. agrees to continue selling any unsold shares after the initial offering period has expired.
E. agrees to purchase any shares remaining in a new issue after the firm has done its best to sell all of the
shares to investors.
8.
The party responsible for regulating the financial markets in the U.S. is the:
A. NYSE.
B. NASDAQ.
C. OTC.
D. Federal Reserve.
E. SEC.
9.
The document that is prepared as part of a security offering which details a company's financial position,
its operations, and its plans for the future is called the:
A. tombstone.
B. prospectus.
C. offering agreement.
D. regulatory agreement.
E. offering paper.
10. A red herring is a(n):
A. securities issue which has been delayed.
B. securities issue which has been marked as risky by the regulators.
C. preliminary prospectus that has not yet been approved by the regulators.
D. term applied to a security's issue which is undersold.
E. agreement between the issuer and an investment banker to offer securities to the public.
11. A party which buys and sells securities from inventory is called a(n):
A. issuer.
B. broker.
C. dealer.
D. floor broker.
E. member.
12. A party which arranges security transactions between buyers and sellers is called a(n):
A. issuer.
B. broker.
C. dealer.
D. floor broker.
E. underwriter.
13. The price at which a dealer will buy a security from you is called the _____ price.
A. bid
B. ask
C. issue
D. offer
E. floor
2
14. The price at which you can buy a security from a dealer is called the _____ price.
A. bid
B. ask
C. issue
D. offer
E. floor
15. The difference between a dealer's purchasing price and selling price is called the:
A. margin.
B. bid.
C. float.
D. offer.
E. spread.
16. An owner of a seat on the New York Stock Exchange is called a:
A. broker.
B. shareholder.
C. member.
D. trader.
E. facilitator.
17. An employee of a NYSE member firm who executes customer orders to buy and sell securities on the
exchange is called a:
A. market maker.
B. specialist.
C. member.
D. floor broker.
E. floor trader.
18. A person who acts as a dealer on the exchange floor and provides liquidity to the market for assigned
securities is called a:
A. floor trader.
B. specialist.
C. floor post.
D. member.
E. house broker.
19. The SuperDOT system is the:
A. system which maintains the historical records of each customer's trading activity.
B. system which transmits the latest market information to the news media.
C. computerized system which permits trading from computer terminals located on the floor of the
exchange.
D. system which tracks the actions on the floor to ensure regulatory compliance.
E. electronic system which transmits orders directly to specialists for immediate execution.
20. A person who is a member of the exchange and trades only for his or her own account is called a(n):
A. floor trader.
B. specialist.
C. individual floater.
D. member.
E. house broker.
3
21. The location on the floor of an exchange where the buying and selling of a particular security occurs is
called the:
A. specialist's post.
B. broker's terminal.
C. trading terminal.
D. exchange spot.
E. market pit.
22. Margie wants to buy 100 shares of Microsoft stock immediately. She should place a(n) _____ order.
A. limit
B. post
C. market
D. short
E. exchange
23. An order to buy or sell only at a particular price or better is called a _____ order.
A. limit
B. post
C. market
D. asked
E. bid
24. A customer order which converts to a market order when a pre-specified price is reached is called
a(n)_____ order.
A. limit
B. day
C. stop
D. short
E. uptick
25. The regulation that states that a short sale can only be executed if the last price change moved the market
price of the security higher is called the _____ rule.
A. cash order
B. limit
C. stop-limit
D. high-end
E. uptick
26. The over-the-counter (OTC) market is defined as a securities market wherein the trading almost
exclusively involves:
A. individual investors.
B. technology stocks.
C. dealers.
D. electronic brokers.
E. day traders.
27. A website that enables investors to trade directly with each other is called a(n):
A. private trading floor.
B. over-the-counter market.
C. computerized trading floor.
D. electronic communications network.
E. cellular market.
4
28. Inside quotes are the:
A. highest asked and lowest bid quotes offered by securities dealers.
B. highest bid and lowest asked quotes offered by securities dealers.
C. latest prices at which corporate insiders have purchased or sold securities.
D. bid and asked prices which are offered only to institutional traders or large private investors.
E. latest buy and sell limit order prices placed by individual investors on the floor of an exchange.
29. Trading in exchange-listed securities that occurs off the exchange on which the security is listed is
referred to as the _____ market.
A. independent
B. electronic
C. fourth
D. third
E. OTC
30. Trading between individual investors through a computer network is referred to as the _____ market.
A. home
B. computerized
C. third
D. fourth
E. electronic exchange
31. A stock market index in which stocks are held in proportion to their share prices is called a _____
index.
A. balanced
B. market-weighted
C. diluted
D. price-weighted
E. value-weighted
32. When stocks are held in an index in proportion to their total company market value, the index is:
A. balanced.
B. front-weighted.
C. back-weighted.
D. price-weighted.
E. value-weighted.
33. If some of the stocks in an index have not traded recently a condition is created that is called index:
A. lag.
B. deflation.
C. staleness.
D. delay.
E. inflation.
34. The underwriting agreement commonly requires that the original shareholders will not sell their shares
for a period of _____ after the underwriting.
A. one month
B. three months
C. six months
D. one year
E. eighteen months
5
35. When a registration statement for an IPO is filed, the SEC verifies that the:
A. offering will provide value to the shareholders.
B. issuer is financially sound.
C. issuer will remain solvent.
D. rules have been followed to allow for full disclosure of information.
E. stock price is set at a level which will allow shareholders to earn a positive return.
36. A tombstone generally lists all of the following except the:
A. value of the issue.
B. name of the issuer.
C. purpose of the offering.
D. name(s) of the underwriter(s).
E. offering price.
37. Which one of the following transactions involving stock occurs in the primary market?
A. sale by Shareholder A to Shareholder B
B. gift of shares from a grandmother to her granddaughter
C. sale of newly issued shares to a shareholder
D. trade arranged by a broker
E. purchase by a dealer from a shareholder
38. Mark currently owns 145,000 shares of a stock. He will sell those shares for $16.20 a share. He is also
willing to purchase additional shares for $16.15 a share. Mark is a securities:
A. broker.
B. representative.
C. underwriter.
D. floor broker.
E. dealer.
39. GL Enterprises has 130,000 shares of stock outstanding. Janet wants to buy 400 of these shares. The
price she will have to pay is the _____ price.
A. margin
B. bid
C. ask
D. broker
E. spread
40. The NYSE is:
A. an electronic dealer's network.
B. a broker's market.
C. a floor dealer's market.
D. all electronic.
E. owned entirely by Merrill Lynch.
41. A member of the NYSE:
A. can not lease his or her seat.
B. functions strictly as a specialist on the trading floor.
C. can buy securities on the trading floor without paying a commission.
D. can only place trades on behalf of others.
E. must be re-elected every 3 years.
6
42. Which one of the following has the greatest duty to provide liquidity to the financial market?
A. floor broker
B. independent broker
C. dealer
D. specialist
E. floor trader
43. To be listed on the NYSE, a firm must have:
A. $3 million in pre-tax earnings in each of the last 3 years.
B. annual earnings of $10 million for the last fiscal year.
C. 5 million shares of stock outstanding.
D. an average of 250,000 shares of stock traded monthly.
E. publicly held shares valued at $100 million or more except for an IPO offering.
44. Justin placed an order to sell 500 shares of a stock. As soon as the order reached the trading floor, a floor
broker went to the specialist's post and sold 500 shares. Justin must have placed a _____ order.
A. limit
B. day
C. market
D. short
E. stop-sell
45. Jennifer placed an order to buy 300 shares of GLM stock. As soon as the order reached the trading floor,
a floor broker went to the specialist's post and had the order placed in the order book. The order will be
executed at the requested price or lower. Jennifer must have placed a _____ order.
A. limit
B. day
C. market
D. short
E. stop-sell
46. Tomas wants to sell his 100 shares of BBG stock at the going market price after the stock reaches a price
of $34 a share. Tomas should place a _____ order.
A. stop
B. limit
C. market
D. flexible
E. loss
47. After the trigger point is reached, a stop order will be executed at the:
A. trigger price.
B. stop price.
C. trigger price or better.
D. stop price or better.
E. market price.
7
48. Which one of the following orders is frequently used as a means to limit losses resulting from a short
sale?
A. contingent
B. market
C. day
D. stop-sell
E. stop-buy
49. Peter wants to place a short-sale order. After which one of these series of transaction prices will he be
allowed to place his order?
A. $14.18, $14.20, $14.19
B. $17.34, $17.33, $17.33
C. $21.12, $21.13, $21.12
D. $11.10, $11.09, $11.08
E. $16.89, $16.90, $16.90
50. The varying colors of the coats worn on the floor of the NYSE are used as a means of identifying:
A. the firm by whom a person is employed.
B. securities buyers from securities sellers.
C. persons trading common stocks from persons trading preferred stocks or bonds.
D. NYSE members from non-members.
E. a person's job function.
51. Securities dealers on NASDAQ post their prices as well as:
A. their commission rates.
B. their front-end load charges.
C. the number of shares they will commit to buy or sell.
D. their total trades for the day.
E. their trading fees.
52. Which one of the following statements is correct concerning NASDAQ?
A. NASDAQ is actually two separate markets.
B. NASDAQ is a broker's market.
C. The NASDAQ trading floor is located in Chicago.
D. NASDAQ is the third largest stock market in the U.S.
E. NASDAQ uses specialists to keep the market liquid.
53. The orders displayed on the NASDAQ are placed by:
A. individuals on ECNs only.
B. market makers only.
C. both market makers and individuals on ECNs.
D. brokerage firms.
E. floor brokers.
54. A listing of all the posted bid and ask prices on NASDAQ listed securities are available as:
A. Level I quotes.
B. Level II quotes.
C. ECN quotes.
D. supplemental quotes to the NYSE prices.
E. third market quotes.
8
55. Stocks which are listed on the NYSE can:
A. not be listed on any other exchange.
B. only be dual listed on a regional exchange.
C. only be dual listed on Instinet.
D. only be dual listed on NASDAQ.
E. be dual listed on other exchanges.
56. The DJIA is an index of the stock prices of _____ firms.
A. 25
B. 30
C. 50
D. 100
E. 500
57. Stock market indexes:
A. are all computed using the same methodology.
B. all react the same to a change in the price of a particular stock.
C. all cover the same market sectors.
D. are all price-weighted.
E. vary in the type of stocks included.
58. The index divisor:
A. for the DJIA is 30.
B. remains constant once it is established.
C. tends to increase over time.
D. is equal to the number of stocks in the index.
E. decreases in response to stock splits.
59. Most stock indexes:
A. have a constant divisor which is equal to the number of securities in the index.
B. are based on the 500 largest U.S. companies.
C. reflect both dividends and capital gains.
D. are based on 100 stocks.
E. are based on capital gains only.
60. A particular index is based on technology stocks. On any given day, 30 percent of the stocks in the index
do not trade. This index is subject to index:
A. redundancy.
B. inversion.
C. staleness.
D. interruption.
E. re-allocation.
61. Your firm just sold 1.5 million shares through an IPO offering. The shares were offered at $16 a share
and all shares were sold. Your firm received a total of $22.5 million as a fixed commitment. What
percent of the offering price did the underwriter's charge as their fee?
A. 4.75 percent
B. 5.00 percent
C. 5.50 percent
D. 6.25 percent
E. 6.50 percent
9
62. Big Town Underwriters has agreed to a firm commitment underwriting in which they will pay you
$20.75 million in exchange for 2 million shares of stock for an IPO offering for your company. The
offering price is expected to be $11 a share. If Big Town can sell all of the shares, they will earn
underwriting fees of _____ million.
A. $1.00
B. $1.25
C. $1.50
D. $2.00
E. $2.25
63. The Michael James Co. offered 2.5 million shares of stock at an offering price of $21 a share in an IPO.
The sale was conducted on a best efforts basis with a spread of 6 percent of the offering price. Michael
James received a total of $39,983,370 in proceeds from the sale. How many shares were sold?
A. 1,903,970 shares
B. 2,025,500 shares
C. 2,345,840 shares
D. 2,550,000 shares
E. 2,667,790 shares
64. Windsor Underwriters handled the IPO for your firm. The underwriting consisted of 1.5 million shares at
an offer price of $13 a share. Windsor handled this on a best efforts basis and charged a 7 percent
underwriter's fee. Your firm received a total of $11,751,480 as IPO proceeds. How many shares of the
IPO offering were sold?
A. 875,000 shares
B. 903,960 shares
C. 967,237 shares
D. 972,000 shares
E. 981,400 shares
65. Avery Underwriters paid your firm $33.66 million as IPO proceeds. The IPO offered 2.25 million shares
of which 2.02 million were sold at an offer price of $16 a share. The underwriting spread was 6.5
percent. What type of underwriting was this?
A. best efforts
B. variable
C. fixed commitment
D. plain vanilla
E. stand-by
10
66. An index consists of the following securities and has an index divisor of 3.0. What is the price-weighted
index return?
A. 7.42 percent
B. 7.59 percent
C. 7.70 percent
D. 7.78 percent
E. 7.81 percent
67. An index consists of the following securities and has an index divisor of 3.0. What is the price-weighted
index return?
A. 6.67 percent
B. 7.11 percent
C. 7.40 percent
D. 8.02 percent
E. 8.33 percent
68. An index consists of the following securities and has an index divisor of 3.0. What is the price-weighted
index return?
A. 4.76 percent
B. 4.85 percent
C. 5.13 percent
D. 5.17 percent
E. 5.20 percent
11
69. An index consists of the following securities and has an index divisor of 2.0. What is the price-weighted
index return?
A. 5.82 percent
B. 6.48 percent
C. 6.67 percent
D. 7.00 percent
E. 7.28 percent
70. A price-weighted index consists of stocks A, B, and C which are priced at $24, $39, and $27 a share,
respectively. The current index divisor is 2.7. If stock B undergoes a 3-for-1 stock split, the new index
divisor will be:
A. 1.67.
B. 1.78.
C. 1.83.
D. 1.92.
E. 1.95.
71. A price-weighted index consists of stocks A, B, and C which are priced at $32, $64, and $41 a share,
respectively. The current index divisor is 2.45. If stock B undergoes a 4-for-1 stock split, the new index
divisor will be:
A. 1.5916.
B. 1.5960.
C. 1.6032.
D. 1.6130.
E. 1.6667.
72. A price-weighted index consists of stocks A, B, and C which are priced at $24, $9, and $38 a share,
respectively. The current index divisor is 2.62. If stock B undergoes a 1-for-3 stock split, the new index
divisor will be:
A. 2.0901.
B. 2.1806.
C. 2.2000.
D. 3.2842.
E. 3.3106.
12
73. An index consists of the following securities. What is the value-weighted index return?
A. 2.45 percent
B. 3.03 percent
C. 3.49 percent
D. 4.82 percent
E. 5.01 percent
74. An index consists of the following securities. What is the value-weighted index return?
A. 3.58 percent
B. 4.02 percent
C. 5.91 percent
D. 6.03 percent
E. 6.12 percent
75. An index consists of the following securities. What is the value-weighted index return?
A. 3.03 percent
B. 4.16 percent
C. 4.89 percent
D. 5.42 percent
E. 5.63 percent
13
76. An index consists of the following securities. What is the equal-weighted index return?
A. -12.59 percent
B. -11.00 percent
C. -6.08 percent
D. -4.92 percent
E. -3.08 percent
77. An index consists of the following securities. What is the equal-weighted index return?
A. 9.09 percent
B. 11.11 percent
C. 12.07 percent
D. 12.78 percent
E. 13.39 percent
78. An index consists of the following securities. What is the equal-weighted index return?
A. 6.67 percent
B. 7.18 percent
C. 8.28 percent
D. 8.49 percent
E. 8.63 percent
14
79. You have the following information:
You want the beginning price-weighted index of these two stocks to be 100. Given this, what is the
ending index value?
A. 95.65
B. 96.35
C. 104.35
D. 105.25
E. 105.35
80. You have the following information:
You want the beginning price-weighted index of these two stocks to be 500. Given this, what is the
ending index value?
A. 445.65
B. 454.35
C. 525.65
D. 545.65
E. 554.35
81. An index has a market value of $7,247,800 at the beginning of the period and $7,489,200 at the end of
the period. If you want the beginning index value to be 1,000, what is the ending index value?
A. 966.69
B. 996.70
C. 1,033.31
D. 1,036.67
E. 1,041.41
82. An index has a market value of $11,426,500 at the beginning of the period and $11,022,200 at the end of
the period. If you want the beginning index value to be 500, what is the ending index value?
A. 482.31
B. 484.14
C. 484.36
D. 485.05
E. 485.60
15
83. Yesterday, the DJIA closed at 11,608.20. The divisor is .13600214. Today, 29 of the stocks in the index
were unchanged. One stock rose from $76.20 a share yesterday to $77.40 a share today. What is the
DJIA index value at the close of trading today?
A. 11,609.13
B. 11,609.87
C. 11,616.67
D. 11,617.02
E. 11,622.48
84. Yesterday, the DJIA closed at 12,051.96. The divisor is .13402801. Today, every one of the stocks in the
index increased in value by $.50 a share. What is the value of today's closing DJIA?
A. 12,066.96
B. 12,081.42
C. 12,142.04
D. 12,163.88
E. 12,171.11
85. An order book displays the following information:
You place an order to buy 100 shares. At what price will your order be executed?
A. $34.08
B. $34.09
C. $34.11
D. $34.13
E. $34.14
86. An order book displays the following information:
You place an order to buy 100 shares. At what price will your order be executed?
A. $16.05
B. $16.06
C. $16.08
D. $16.10
E. $16.15
16
87. An order book displays the following information:
You place an order to sell 100 shares. At what price will your order be executed?
A. $22.12
B. $22.15
C. $22.16
D. $22.18
E. $22.20
17
ch5 Key
1.
Mary is buying 100 shares of stock from ALAT, Inc., as part of a new stock issue trading on the
NYSE. This sale is occurring in the _____ market.
A.
B.
C.
D.
E.
primary
secondary
third
fourth
over-the-counter
Jordan - Chapter 05 #1
Topic: PRIMARY MARKET
Type: DEFINITIONS
2.
Peter is buying 500 shares of stock from George in the NASDAQ market. This transaction is
occurring in the _____ market.
A.
B.
C.
D.
E.
primary
secondary
third
fourth
fifth
Jordan - Chapter 05 #2
Topic: SECONDARY MARKET
Type: DEFINITIONS
3.
The first time a firm sells shares of stock to the public is called a(n) _____ offering.
A.
B.
C.
D.
E.
open-end
break-out
public service
initial public
initial trial
Jordan - Chapter 05 #3
Topic: INITIAL PUBLIC OFFERING
Type: DEFINITIONS
4.
An investment banking firm is a company that:
A.
B.
C.
D.
E.
provides portfolio management services to a hedge fund.
manages either a mutual fund or a hedge fund.
transacts trades for shareholders.
oversees the investments in securities for a financial institution.
specializes in finding buyers for newly issued securities.
Jordan - Chapter 05 #4
Topic: INVESTMENT BANKING FIRM
Type: DEFINITIONS
1
5.
When a firm assumes the risk of purchasing newly issued securities from a company and reselling
those shares to investors, the firm is said to be _____ the issue.
A.
B.
C.
D.
E.
underwriting
capitalizing
securing
fixing
deploying
Jordan - Chapter 05 #5
Topic: UNDERWRITING
Type: DEFINITIONS
6.
A _____ commitment underwriting is an arrangement where the underwriter pays the issuer a stated
amount whether or not the underwriter can sell all of the shares in the issue to investors.
A.
B.
C.
D.
E.
standby
fixed
variable
best efforts
clean sweep
Jordan - Chapter 05 #6
Topic: FIXED COMMITMENT
Type: DEFINITIONS
7.
A best efforts underwriting is an arrangement where an investment banker:
A. buys all of a new issue of securities from the issuer and then attempts to resell those securities.
B. pays a fixed amount to the issuer and then tries to resell as many of the shares as possible.
C. tries to sell as many shares of a new issue as possible and only pays for the shares which are
actually sold to investors.
D. agrees to continue selling any unsold shares after the initial offering period has expired.
E. agrees to purchase any shares remaining in a new issue after the firm has done its best to sell all of
the shares to investors.
Jordan - Chapter 05 #7
Topic: BEST EFFORTS
Type: DEFINITIONS
8.
The party responsible for regulating the financial markets in the U.S. is the:
A.
B.
C.
D.
E.
NYSE.
NASDAQ.
OTC.
Federal Reserve.
SEC.
Jordan - Chapter 05 #8
Topic: SECURITIES AND EXCHANGE COMMISSION (SEC)
Type: DEFINITIONS
9.
The document that is prepared as part of a security offering which details a company's financial
position, its operations, and its plans for the future is called the:
A.
B.
C.
D.
E.
tombstone.
prospectus.
offering agreement.
regulatory agreement.
offering paper.
Jordan - Chapter 05 #9
Topic: PROSPECTUS
Type: DEFINITIONS
2
10.
A red herring is a(n):
A.
B.
C.
D.
E.
securities issue which has been delayed.
securities issue which has been marked as risky by the regulators.
preliminary prospectus that has not yet been approved by the regulators.
term applied to a security's issue which is undersold.
agreement between the issuer and an investment banker to offer securities to the public.
Jordan - Chapter 05 #10
Topic: RED HERRING
Type: DEFINITIONS
11.
A party which buys and sells securities from inventory is called a(n):
A.
B.
C.
D.
E.
issuer.
broker.
dealer.
floor broker.
member.
Jordan - Chapter 05 #11
Topic: DEALER
Type: DEFINITIONS
12.
A party which arranges security transactions between buyers and sellers is called a(n):
A.
B.
C.
D.
E.
issuer.
broker.
dealer.
floor broker.
underwriter.
Jordan - Chapter 05 #12
Topic: BROKER
Type: DEFINITIONS
13.
The price at which a dealer will buy a security from you is called the _____ price.
A.
B.
C.
D.
E.
bid
ask
issue
offer
floor
Jordan - Chapter 05 #13
Topic: BID PRICE
Type: DEFINITIONS
14.
The price at which you can buy a security from a dealer is called the _____ price.
A.
B.
C.
D.
E.
bid
ask
issue
offer
floor
Jordan - Chapter 05 #14
Topic: ASK PRICE
Type: DEFINITIONS
3
15.
The difference between a dealer's purchasing price and selling price is called the:
A.
B.
C.
D.
E.
margin.
bid.
float.
offer.
spread.
Jordan - Chapter 05 #15
Topic: SPREAD
Type: DEFINITIONS
16.
An owner of a seat on the New York Stock Exchange is called a:
A.
B.
C.
D.
E.
broker.
shareholder.
member.
trader.
facilitator.
Jordan - Chapter 05 #16
Topic: NYSE MEMBER
Type: DEFINITIONS
17.
An employee of a NYSE member firm who executes customer orders to buy and sell securities on the
exchange is called a:
A.
B.
C.
D.
E.
market maker.
specialist.
member.
floor broker.
floor trader.
Jordan - Chapter 05 #17
Topic: FLOOR BROKER
Type: DEFINITIONS
18.
A person who acts as a dealer on the exchange floor and provides liquidity to the market for assigned
securities is called a:
A.
B.
C.
D.
E.
floor trader.
specialist.
floor post.
member.
house broker.
Jordan - Chapter 05 #18
Topic: SPECIALIST
Type: DEFINITIONS
19.
The SuperDOT system is the:
A. system which maintains the historical records of each customer's trading activity.
B. system which transmits the latest market information to the news media.
C. computerized system which permits trading from computer terminals located on the floor of the
exchange.
D. system which tracks the actions on the floor to ensure regulatory compliance.
E. electronic system which transmits orders directly to specialists for immediate execution.
Jordan - Chapter 05 #19
Topic: SUPERDOT
Type: DEFINITIONS
4
20.
A person who is a member of the exchange and trades only for his or her own account is called a(n):
A.
B.
C.
D.
E.
floor trader.
specialist.
individual floater.
member.
house broker.
Jordan - Chapter 05 #20
Topic: FLOOR TRADER
Type: DEFINITIONS
21.
The location on the floor of an exchange where the buying and selling of a particular security occurs
is called the:
A.
B.
C.
D.
E.
specialist's post.
broker's terminal.
trading terminal.
exchange spot.
market pit.
Jordan - Chapter 05 #21
Topic: SPECIALIST'S POST
Type: DEFINITIONS
22.
Margie wants to buy 100 shares of Microsoft stock immediately. She should place a(n) _____ order.
A.
B.
C.
D.
E.
limit
post
market
short
exchange
Jordan - Chapter 05 #22
Topic: MARKET ORDER
Type: DEFINITIONS
23.
An order to buy or sell only at a particular price or better is called a _____ order.
A.
B.
C.
D.
E.
limit
post
market
asked
bid
Jordan - Chapter 05 #23
Topic: LIMIT ORDER
Type: DEFINITIONS
24.
A customer order which converts to a market order when a pre-specified price is reached is called
a(n)_____ order.
A.
B.
C.
D.
E.
limit
day
stop
short
uptick
Jordan - Chapter 05 #24
Topic: STOP ORDER
Type: DEFINITIONS
5
25.
The regulation that states that a short sale can only be executed if the last price change moved the
market price of the security higher is called the _____ rule.
A.
B.
C.
D.
E.
cash order
limit
stop-limit
high-end
uptick
Jordan - Chapter 05 #25
Topic: NYSE UPTICK RULE
Type: DEFINITIONS
26.
The over-the-counter (OTC) market is defined as a securities market wherein the trading almost
exclusively involves:
A.
B.
C.
D.
E.
individual investors.
technology stocks.
dealers.
electronic brokers.
day traders.
Jordan - Chapter 05 #26
Topic: OTC MARKET
Type: DEFINITIONS
27.
A website that enables investors to trade directly with each other is called a(n):
A.
B.
C.
D.
E.
private trading floor.
over-the-counter market.
computerized trading floor.
electronic communications network.
cellular market.
Jordan - Chapter 05 #27
Topic: ELECTRONIC COMMUNICATIONS NETWORK (ECN)
Type: DEFINITIONS
28.
Inside quotes are the:
A.
B.
C.
D.
E.
highest asked and lowest bid quotes offered by securities dealers.
highest bid and lowest asked quotes offered by securities dealers.
latest prices at which corporate insiders have purchased or sold securities.
bid and asked prices which are offered only to institutional traders or large private investors.
latest buy and sell limit order prices placed by individual investors on the floor of an exchange.
Jordan - Chapter 05 #28
Topic: INSIDE QUOTES
Type: DEFINITIONS
29.
Trading in exchange-listed securities that occurs off the exchange on which the security is listed is
referred to as the _____ market.
A.
B.
C.
D.
E.
independent
electronic
fourth
third
OTC
Jordan - Chapter 05 #29
Topic: THIRD MARKET
Type: DEFINITIONS
6
30.
Trading between individual investors through a computer network is referred to as the _____
market.
A.
B.
C.
D.
E.
home
computerized
third
fourth
electronic exchange
Jordan - Chapter 05 #30
Topic: FOURTH MARKET
Type: DEFINITIONS
31.
A stock market index in which stocks are held in proportion to their share prices is called a _____
index.
A.
B.
C.
D.
E.
balanced
market-weighted
diluted
price-weighted
value-weighted
Jordan - Chapter 05 #31
Topic: PRICE-WEIGHTED INDEX
Type: DEFINITIONS
32.
When stocks are held in an index in proportion to their total company market value, the index is:
A.
B.
C.
D.
E.
balanced.
front-weighted.
back-weighted.
price-weighted.
value-weighted.
Jordan - Chapter 05 #32
Topic: VALUE-WEIGHTED INDEX
Type: DEFINITIONS
33.
If some of the stocks in an index have not traded recently a condition is created that is called index:
A.
B.
C.
D.
E.
lag.
deflation.
staleness.
delay.
inflation.
Jordan - Chapter 05 #33
Topic: INDEX STALENESS
Type: DEFINITIONS
34.
The underwriting agreement commonly requires that the original shareholders will not sell their
shares for a period of _____ after the underwriting.
A.
B.
C.
D.
E.
one month
three months
six months
one year
eighteen months
Jordan - Chapter 05 #34
Topic: IPO RESTRICTIONS
Type: CONCEPTS
7
35.
When a registration statement for an IPO is filed, the SEC verifies that the:
A.
B.
C.
D.
E.
offering will provide value to the shareholders.
issuer is financially sound.
issuer will remain solvent.
rules have been followed to allow for full disclosure of information.
stock price is set at a level which will allow shareholders to earn a positive return.
Jordan - Chapter 05 #35
Topic: SEC REGISTRATION
Type: CONCEPTS
36.
A tombstone generally lists all of the following except the:
A.
B.
C.
D.
E.
value of the issue.
name of the issuer.
purpose of the offering.
name(s) of the underwriter(s).
offering price.
Jordan - Chapter 05 #36
Topic: TOMBSTONE
Type: CONCEPTS
37.
Which one of the following transactions involving stock occurs in the primary market?
A.
B.
C.
D.
E.
sale by Shareholder A to Shareholder B
gift of shares from a grandmother to her granddaughter
sale of newly issued shares to a shareholder
trade arranged by a broker
purchase by a dealer from a shareholder
Jordan - Chapter 05 #37
Topic: PRIMARY MARKET
Type: CONCEPTS
38.
Mark currently owns 145,000 shares of a stock. He will sell those shares for $16.20 a share. He is
also willing to purchase additional shares for $16.15 a share. Mark is a securities:
A.
B.
C.
D.
E.
broker.
representative.
underwriter.
floor broker.
dealer.
Jordan - Chapter 05 #38
Topic: DEALER
Type: CONCEPTS
39.
GL Enterprises has 130,000 shares of stock outstanding. Janet wants to buy 400 of these shares. The
price she will have to pay is the _____ price.
A.
B.
C.
D.
E.
margin
bid
ask
broker
spread
Jordan - Chapter 05 #39
Topic: ASK PRICE
Type: CONCEPTS
8
40.
The NYSE is:
A.
B.
C.
D.
E.
an electronic dealer's network.
a broker's market.
a floor dealer's market.
all electronic.
owned entirely by Merrill Lynch.
Jordan - Chapter 05 #40
Topic: NYSE
Type: CONCEPTS
41.
A member of the NYSE:
A.
B.
C.
D.
E.
can not lease his or her seat.
functions strictly as a specialist on the trading floor.
can buy securities on the trading floor without paying a commission.
can only place trades on behalf of others.
must be re-elected every 3 years.
Jordan - Chapter 05 #41
Topic: NYSE
Type: CONCEPTS
42.
Which one of the following has the greatest duty to provide liquidity to the financial market?
A.
B.
C.
D.
E.
floor broker
independent broker
dealer
specialist
floor trader
Jordan - Chapter 05 #42
Topic: SPECIALIST
Type: CONCEPTS
43.
To be listed on the NYSE, a firm must have:
A.
B.
C.
D.
E.
$3 million in pre-tax earnings in each of the last 3 years.
annual earnings of $10 million for the last fiscal year.
5 million shares of stock outstanding.
an average of 250,000 shares of stock traded monthly.
publicly held shares valued at $100 million or more except for an IPO offering.
Jordan - Chapter 05 #43
Topic: NYSE LISTING
Type: CONCEPTS
44.
Justin placed an order to sell 500 shares of a stock. As soon as the order reached the trading floor, a
floor broker went to the specialist's post and sold 500 shares. Justin must have placed a _____ order.
A.
B.
C.
D.
E.
limit
day
market
short
stop-sell
Jordan - Chapter 05 #44
Topic: MARKET ORDER
Type: CONCEPTS
9
45.
Jennifer placed an order to buy 300 shares of GLM stock. As soon as the order reached the trading
floor, a floor broker went to the specialist's post and had the order placed in the order book. The order
will be executed at the requested price or lower. Jennifer must have placed a _____ order.
A.
B.
C.
D.
E.
limit
day
market
short
stop-sell
Jordan - Chapter 05 #45
Topic: LIMIT ORDER
Type: CONCEPTS
46.
Tomas wants to sell his 100 shares of BBG stock at the going market price after the stock reaches a
price of $34 a share. Tomas should place a _____ order.
A.
B.
C.
D.
E.
stop
limit
market
flexible
loss
Jordan - Chapter 05 #46
Topic: STOP ORDER
Type: CONCEPTS
47.
After the trigger point is reached, a stop order will be executed at the:
A.
B.
C.
D.
E.
trigger price.
stop price.
trigger price or better.
stop price or better.
market price.
Jordan - Chapter 05 #47
Topic: STOP ORDER
Type: CONCEPTS
48.
Which one of the following orders is frequently used as a means to limit losses resulting from a short
sale?
A.
B.
C.
D.
E.
contingent
market
day
stop-sell
stop-buy
Jordan - Chapter 05 #48
Topic: STOP-BUY ORDER
Type: CONCEPTS
49.
Peter wants to place a short-sale order. After which one of these series of transaction prices will he be
allowed to place his order?
A.
B.
C.
D.
E.
$14.18, $14.20, $14.19
$17.34, $17.33, $17.33
$21.12, $21.13, $21.12
$11.10, $11.09, $11.08
$16.89, $16.90, $16.90
Jordan - Chapter 05 #49
Topic: NYSE UPTICK RULE
Type: CONCEPTS
10
50.
The varying colors of the coats worn on the floor of the NYSE are used as a means of identifying:
A.
B.
C.
D.
E.
the firm by whom a person is employed.
securities buyers from securities sellers.
persons trading common stocks from persons trading preferred stocks or bonds.
NYSE members from non-members.
a person's job function.
Jordan - Chapter 05 #50
Topic: NYSE COAT COLORS
Type: CONCEPTS
51.
Securities dealers on NASDAQ post their prices as well as:
A.
B.
C.
D.
E.
their commission rates.
their front-end load charges.
the number of shares they will commit to buy or sell.
their total trades for the day.
their trading fees.
Jordan - Chapter 05 #51
Topic: NASDAQ
Type: CONCEPTS
52.
Which one of the following statements is correct concerning NASDAQ?
A.
B.
C.
D.
E.
NASDAQ is actually two separate markets.
NASDAQ is a broker's market.
The NASDAQ trading floor is located in Chicago.
NASDAQ is the third largest stock market in the U.S.
NASDAQ uses specialists to keep the market liquid.
Jordan - Chapter 05 #52
Topic: NASDAQ
Type: CONCEPTS
53.
The orders displayed on the NASDAQ are placed by:
A.
B.
C.
D.
E.
individuals on ECNs only.
market makers only.
both market makers and individuals on ECNs.
brokerage firms.
floor brokers.
Jordan - Chapter 05 #53
Topic: NASDAQ
Type: CONCEPTS
54.
A listing of all the posted bid and ask prices on NASDAQ listed securities are available as:
A.
B.
C.
D.
E.
Level I quotes.
Level II quotes.
ECN quotes.
supplemental quotes to the NYSE prices.
third market quotes.
Jordan - Chapter 05 #54
Topic: LEVEL II QUOTES
Type: CONCEPTS
11
55.
Stocks which are listed on the NYSE can:
A.
B.
C.
D.
E.
not be listed on any other exchange.
only be dual listed on a regional exchange.
only be dual listed on Instinet.
only be dual listed on NASDAQ.
be dual listed on other exchanges.
Jordan - Chapter 05 #55
Topic: DUAL LISTINGS
Type: CONCEPTS
56.
The DJIA is an index of the stock prices of _____ firms.
A.
B.
C.
D.
E.
25
30
50
100
500
Jordan - Chapter 05 #56
Topic: DJIA
Type: CONCEPTS
57.
Stock market indexes:
A.
B.
C.
D.
E.
are all computed using the same methodology.
all react the same to a change in the price of a particular stock.
all cover the same market sectors.
are all price-weighted.
vary in the type of stocks included.
Jordan - Chapter 05 #57
Topic: MARKET INDEXES
Type: CONCEPTS
58.
The index divisor:
A.
B.
C.
D.
E.
for the DJIA is 30.
remains constant once it is established.
tends to increase over time.
is equal to the number of stocks in the index.
decreases in response to stock splits.
Jordan - Chapter 05 #58
Topic: INDEX DIVISORS
Type: CONCEPTS
59.
Most stock indexes:
A.
B.
C.
D.
E.
have a constant divisor which is equal to the number of securities in the index.
are based on the 500 largest U.S. companies.
reflect both dividends and capital gains.
are based on 100 stocks.
are based on capital gains only.
Jordan - Chapter 05 #59
Topic: STOCK INDEXES
Type: CONCEPTS
12
60.
A particular index is based on technology stocks. On any given day, 30 percent of the stocks in the
index do not trade. This index is subject to index:
A.
B.
C.
D.
E.
redundancy.
inversion.
staleness.
interruption.
re-allocation.
Jordan - Chapter 05 #60
Topic: INDEX STALENESS
Type: CONCEPTS
61.
Your firm just sold 1.5 million shares through an IPO offering. The shares were offered at $16 a
share and all shares were sold. Your firm received a total of $22.5 million as a fixed commitment.
What percent of the offering price did the underwriter's charge as their fee?
A.
B.
C.
D.
E.
4.75 percent
5.00 percent
5.50 percent
6.25 percent
6.50 percent
Underwriter's spread = 1 - [$22.5m / ($16 × 1.5m)] = 1 - $22.5m / $24m = 1 - .9375 = .0625 = 6.25
percent
Jordan - Chapter 05 #61
Topic: UNDERWRITER'S SPREAD
Type: PROBLEMS
62.
Big Town Underwriters has agreed to a firm commitment underwriting in which they will pay you
$20.75 million in exchange for 2 million shares of stock for an IPO offering for your company. The
offering price is expected to be $11 a share. If Big Town can sell all of the shares, they will earn
underwriting fees of _____ million.
A.
B.
C.
D.
E.
$1.00
$1.25
$1.50
$2.00
$2.25
Underwriting fees = ($11 × 2m) - $20.75m = $22m - $20.75m = $1.25m
Jordan - Chapter 05 #62
Topic: UNDERWRITER'S SPREAD
Type: PROBLEMS
13
63.
The Michael James Co. offered 2.5 million shares of stock at an offering price of $21 a share in an
IPO. The sale was conducted on a best efforts basis with a spread of 6 percent of the offering price.
Michael James received a total of $39,983,370 in proceeds from the sale. How many shares were
sold?
A.
B.
C.
D.
E.
1,903,970 shares
2,025,500 shares
2,345,840 shares
2,550,000 shares
2,667,790 shares
Jordan - Chapter 05 #63
Topic: BEST EFFORTS UNDERWRITING
Type: PROBLEMS
64.
Windsor Underwriters handled the IPO for your firm. The underwriting consisted of 1.5 million
shares at an offer price of $13 a share. Windsor handled this on a best efforts basis and charged a 7
percent underwriter's fee. Your firm received a total of $11,751,480 as IPO proceeds. How many
shares of the IPO offering were sold?
A.
B.
C.
D.
E.
875,000 shares
903,960 shares
967,237 shares
972,000 shares
981,400 shares
Jordan - Chapter 05 #64
Topic: BEST EFFORTS UNDERWRITING
Type: PROBLEMS
65.
Avery Underwriters paid your firm $33.66 million as IPO proceeds. The IPO offered 2.25 million
shares of which 2.02 million were sold at an offer price of $16 a share. The underwriting spread was
6.5 percent. What type of underwriting was this?
A.
B.
C.
D.
E.
best efforts
variable
fixed commitment
plain vanilla
stand-by
Jordan - Chapter 05 #65
Topic: FIXED COMMITMENT UNDERWRITING
Type: PROBLEMS
14
66.
An index consists of the following securities and has an index divisor of 3.0. What is the
price-weighted index return?
A.
B.
C.
D.
E.
7.42 percent
7.59 percent
7.70 percent
7.78 percent
7.81 percent
Price-weighted index = {[($22 + $19 + $44) / 3] - [($24 + $18 + $37) / 3]} / [($24 + $18 + $37) / 3] =
($28.33333 - $26.33333) / $26.33333 = .075949 = 7.59 percent
Jordan - Chapter 05 #66
Topic: PRICE-WEIGHTED INDEX
Type: PROBLEMS
67.
An index consists of the following securities and has an index divisor of 3.0. What is the
price-weighted index return?
A.
B.
C.
D.
E.
6.67 percent
7.11 percent
7.40 percent
8.02 percent
8.33 percent
Price-weighted index = {[($37 + $17 + $24) / 3] - [($31 + $22 + $19) / 3]} / [($31 + $22 + $19) / 3] =
($26 - $24) / $24 = .08333 = 8.33 percent
Jordan - Chapter 05 #67
Topic: PRICE-WEIGHTED INDEX
Type: PROBLEMS
15
68.
An index consists of the following securities and has an index divisor of 3.0. What is the
price-weighted index return?
A.
B.
C.
D.
E.
4.76 percent
4.85 percent
5.13 percent
5.17 percent
5.20 percent
Price-weighted index = {[($35 + $49 + $26) / 3] - [($36 + $51 + $18) / 3]} / [($36 + $51 + $18) / 3] =
($36.66667 - $35) / $35 = .04762 = 4.76 percent
Jordan - Chapter 05 #68
Topic: PRICE-WEIGHTED INDEX
Type: PROBLEMS
69.
An index consists of the following securities and has an index divisor of 2.0. What is the
price-weighted index return?
A.
B.
C.
D.
E.
5.82 percent
6.48 percent
6.67 percent
7.00 percent
7.28 percent
Price-weighted index = {[($20 + $28) / 2] - [($19 + $26) / 2]} / [($19 + $26) / 2] = ($24 - $22.50) /
$22.50 = .06667 = 6.67 percent
Jordan - Chapter 05 #69
Topic: PRICE-WEIGHTED INDEX
Type: PROBLEMS
16
70.
A price-weighted index consists of stocks A, B, and C which are priced at $24, $39, and $27 a share,
respectively. The current index divisor is 2.7. If stock B undergoes a 3-for-1 stock split, the new
index divisor will be:
A.
B.
C.
D.
E.
1.67.
1.78.
1.83.
1.92.
1.95.
[24 + (39 / 3) + 27] / [(24 + 39 + 27) / 2.7] = x; 64 / 33.33333 = 1.92
Jordan - Chapter 05 #70
Topic: PRICE-WEIGHTED DIVISOR
Type: PROBLEMS
71.
A price-weighted index consists of stocks A, B, and C which are priced at $32, $64, and $41 a share,
respectively. The current index divisor is 2.45. If stock B undergoes a 4-for-1 stock split, the new
index divisor will be:
A.
B.
C.
D.
E.
1.5916.
1.5960.
1.6032.
1.6130.
1.6667.
[32 + (64 / 4) + 41] / [(32 + 64 + 41) / 2.45] = x; 89 / 55.91837 = 1.5916
Jordan - Chapter 05 #71
Topic: PRICE -WEIGHTED DIVISOR
Type: PROBLEMS
72.
A price-weighted index consists of stocks A, B, and C which are priced at $24, $9, and $38 a share,
respectively. The current index divisor is 2.62. If stock B undergoes a 1-for-3 stock split, the new
index divisor will be:
A.
B.
C.
D.
E.
2.0901.
2.1806.
2.2000.
3.2842.
3.3106.
[24 + (9 × 3) + 38] / [(24 + 9 + 38) / 2.62] = x; 89 / 27.09924 = 3.2842
Jordan - Chapter 05 #72
Topic: PRICE-WEIGHTED DIVISOR
Type: PROBLEMS
17
73.
An index consists of the following securities. What is the value-weighted index return?
A.
B.
C.
D.
E.
2.45 percent
3.03 percent
3.49 percent
4.82 percent
5.01 percent
Beginning value = (8,000 × 27) + (6,000 × 32) = 216,000 + 192,000 = 408,000
Jordan - Chapter 05 #73
Topic: VALUE-WEIGHTED INDEX
Type: PROBLEMS
74.
An index consists of the following securities. What is the value-weighted index return?
A.
B.
C.
D.
E.
3.58 percent
4.02 percent
5.91 percent
6.03 percent
6.12 percent
Beginning value = (2,000 × 47) + (5,000 × 16) + (3,000 × 25) = 94,000 + 80,000 = 75,000 = 249,000
Jordan - Chapter 05 #74
Topic: VALUE-WEIGHTED INDEX
Type: PROBLEMS
18
75.
An index consists of the following securities. What is the value-weighted index return?
A.
B.
C.
D.
E.
3.03 percent
4.16 percent
4.89 percent
5.42 percent
5.63 percent
Beginning value = (4,000 × 36) + (9,000 × 8) + (6,000 × 22) = 144,000 + 72,000 = 132,000 =
348,000
Jordan - Chapter 05 #75
Topic: VALUE-WEIGHTED INDEX
Type: PROBLEMS
76.
An index consists of the following securities. What is the equal-weighted index return?
A.
B.
C.
D.
E.
-12.59 percent
-11.00 percent
-6.08 percent
-4.92 percent
-3.08 percent
Return on Distillers = ($45 - $42) / $42 = .07143
Jordan - Chapter 05 #76
Topic: EQUAL-WEIGHTED INDEX
Type: PROBLEMS
19
77.
An index consists of the following securities. What is the equal-weighted index return?
A.
B.
C.
D.
E.
9.09 percent
11.11 percent
12.07 percent
12.78 percent
13.39 percent
Return on BiHi = ($21 - $15) / $15 = .40000
Jordan - Chapter 05 #77
Topic: EQUAL-WEIGHTED INDEX
Type: PROBLEMS
78.
An index consists of the following securities. What is the equal-weighted index return?
A.
B.
C.
D.
E.
6.67 percent
7.18 percent
8.28 percent
8.49 percent
8.63 percent
Return on Myie = ($42 - $41) / $41 = .02439
Jordan - Chapter 05 #78
Topic: EQUAL-WEIGHTED INDEX
20
79.
You have the following information:
You want the beginning price-weighted index of these two stocks to be 100. Given this, what is the
ending index value?
A.
B.
C.
D.
E.
95.65
96.35
104.35
105.25
105.35
Beginning price-weighted index = (43 + 26) / (43 + 26) × 100 = 69 / 69 × 100 = 100
Jordan - Chapter 05 #79
Topic: REINDEXING
Type: PROBLEMS
80.
You have the following information:
You want the beginning price-weighted index of these two stocks to be 500. Given this, what is the
ending index value?
A.
B.
C.
D.
E.
445.65
454.35
525.65
545.65
554.35
Beginning price-weighted index = (25 + 21) / (25 + 21) × 100 = 46 / 46 × 500 = 500
Jordan - Chapter 05 #80
Topic: REINDEXING
Type: PROBLEMS
21
81.
An index has a market value of $7,247,800 at the beginning of the period and $7,489,200 at the end
of the period. If you want the beginning index value to be 1,000, what is the ending index value?
A.
B.
C.
D.
E.
966.69
996.70
1,033.31
1,036.67
1,041.41
Beginning value-weighted index = 7,247,800 / 7,247,800 × 1,000 = 1,000
Jordan - Chapter 05 #81
Topic: REINDEXING
Type: PROBLEMS
82.
An index has a market value of $11,426,500 at the beginning of the period and $11,022,200 at the
end of the period. If you want the beginning index value to be 500, what is the ending index value?
A.
B.
C.
D.
E.
482.31
484.14
484.36
485.05
485.60
Beginning value-weighted index = 11,426,500 / 11,426,500 × 500 = 500
Jordan - Chapter 05 #82
Topic: REINDEXING
Type: PROBLEMS
83.
Yesterday, the DJIA closed at 11,608.20. The divisor is .13600214. Today, 29 of the stocks in the
index were unchanged. One stock rose from $76.20 a share yesterday to $77.40 a share today. What
is the DJIA index value at the close of trading today?
A.
B.
C.
D.
E.
11,609.13
11,609.87
11,616.67
11,617.02
11,622.48
Old SP = 11,608.20 × .13600214 = 1,578.74
Jordan - Chapter 05 #83
Topic: DJIA
Type: PROBLEMS
22
84.
Yesterday, the DJIA closed at 12,051.96. The divisor is .13402801. Today, every one of the stocks in
the index increased in value by $.50 a share. What is the value of today's closing DJIA?
A.
B.
C.
D.
E.
12,066.96
12,081.42
12,142.04
12,163.88
12,171.11
Old SP = 12,051.96 × .13402801 = 1,615.30
Jordan - Chapter 05 #84
Topic: DJIA
Type: PROBLEMS
85.
An order book displays the following information:
You place an order to buy 100 shares. At what price will your order be executed?
A.
B.
C.
D.
E.
$34.08
$34.09
$34.11
$34.13
$34.14
You will pay the lowest selling price, which is $34.11.
Jordan - Chapter 05 #85
Topic: ORDER BOOK
Type: PROBLEMS
23
86.
An order book displays the following information:
You place an order to buy 100 shares. At what price will your order be executed?
A.
B.
C.
D.
E.
$16.05
$16.06
$16.08
$16.10
$16.15
You will pay the lowest selling price, which is $16.10.
Jordan - Chapter 05 #86
Topic: ORDER BOOK
Type: PROBLEMS
87.
An order book displays the following information:
You place an order to sell 100 shares. At what price will your order be executed?
A.
B.
C.
D.
E.
$22.12
$22.15
$22.16
$22.18
$22.20
You will receive the highest buying price, which is $22.15.
Jordan - Chapter 05 #87
Topic: ORDER BOOK
Type: PROBLEMS
24
ch5 Summary
Category
# of Questions
Jordan - Chapter 05
87
Topic: ASK PRICE
2
Topic: BEST EFFORTS
1
Topic: BEST EFFORTS UNDERWRITING
2
Topic: BID PRICE
1
Topic: BROKER
1
Topic: DEALER
2
Topic: DJIA
3
Topic: DUAL LISTINGS
1
Topic: ELECTRONIC COMMUNICATIONS NETWORK (ECN)
1
Topic: EQUAL-WEIGHTED INDEX
3
Topic: FIXED COMMITMENT
1
Topic: FIXED COMMITMENT UNDERWRITING
1
Topic: FLOOR BROKER
1
Topic: FLOOR TRADER
1
Topic: FOURTH MARKET
1
Topic: INDEX DIVISORS
1
Topic: INDEX STALENESS
2
Topic: INITIAL PUBLIC OFFERING
1
Topic: INSIDE QUOTES
1
Topic: INVESTMENT BANKING FIRM
1
Topic: IPO RESTRICTIONS
1
Topic: LEVEL II QUOTES
1
Topic: LIMIT ORDER
2
Topic: MARKET INDEXES
1
Topic: MARKET ORDER
2
Topic: NASDAQ
3
Topic: NYSE
2
Topic: NYSE COAT COLORS
1
Topic: NYSE LISTING
1
Topic: NYSE MEMBER
1
Topic: NYSE UPTICK RULE
2
Topic: ORDER BOOK
3
Topic: OTC MARKET
1
Topic: PRICE -WEIGHTED DIVISOR
1
Topic: PRICE-WEIGHTED DIVISOR
2
Topic: PRICE-WEIGHTED INDEX
5
Topic: PRIMARY MARKET
2
Topic: PROSPECTUS
1
Topic: RED HERRING
1
Topic: REINDEXING
4
Topic: SEC REGISTRATION
1
Topic: SECONDARY MARKET
1
Topic: SECURITIES AND EXCHANGE COMMISSION (SEC)
1
Topic: SPECIALIST
2
Topic: SPECIALIST'S POST
1
Topic: SPREAD
1
1
Topic: STOCK INDEXES
Topic: STOP ORDER
Topic: STOP-BUY ORDER
Topic: SUPERDOT
Topic: THIRD MARKET
Topic: TOMBSTONE
Topic: UNDERWRITER'S SPREAD
Topic: UNDERWRITING
Topic: VALUE-WEIGHTED INDEX
Type: CONCEPTS
Type: DEFINITIONS
Type: PROBLEMS
1
3
1
1
1
1
2
1
4
27
33
26
2