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Exam 3: How Securities Are Traded

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Question 21

Multiple Choice

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You want to buy 100 shares of Hotstock Inc. at the best possible price as quickly as possible. You would most likely place a

A) stop-loss order.
B) stop-buy order.
C) market order.
D) limit-sell order.
E) limit-buy order.

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Question 22

Multiple Choice

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You sold AAPL stock short at $190 per share. Your losses could be minimized by placing a

A) limit-sell order.
B) limit-buy order.
C) stop-buy order.
D) day-order.
E) None of the options are correct.

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Question 23

Multiple Choice

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Investment bankers

You purchased 1,000 shares of common stock on margin at $30 per share. Assume the initial margin is 50%, and the stock pays no dividend. What would the maintenance margin be if a margin call is made at a stock price of $24? Ignore interest on margin.

You purchased 1,000 shares of PINS common stock on margin at $19 per share. Assume the initial margin is 50%, and the maintenance margin is 30%. Below what stock price level would you get a margin call? Assume the stock pays no dividend; ignore interest on margin.

In a "firm commitment," the investment banker

You purchased 100 shares of common stock on margin at $40 per share. Assume the initial margin is 50%, and the stock pays no dividend. What would the maintenance margin be if a margin call is made at a stock price of $25? Ignore interest on margin.

What kind of entity will often sell a company via an initial public offering, when the firm gets too big for similar entities to purchase?

The cost of buying and selling a stock consists of

You sold short 150 shares of common stock at $27 per share. The initial margin is 45%. Your initial investment was

When a firm markets new securities, a preliminary registration statement must be filed with

Which of the following orders instructs the broker to sell at or above a specified price?

The Securities Act of 1934 I) requires full disclosure of relevant information relating to the issue of new securities. II. requires registration of new securities. III. requires issuance of a prospectus detailing financial prospects of the firm. IV. established the SEC. V. requires periodic disclosure of relevant financial information. VI. empowers SEC to regulate exchanges, OTC trading, brokers, and dealers.

Assume you sold short 100 shares of common stock at $70 per share. The initial margin is 50%. What would be the maintenance margin if a margin call is made at a stock price of $85?

Which of the following orders instructs the broker to buy at or above a specified price?

Who purchased the NYSE in 2013?

You purchased 100 shares of common stock on margin for $60 per share. The initial margin is 50%, and the stock pays no dividend. What would your rate of return be if you sell the stock at $72 per share? Ignore interest on margin.

The process of marketing a public offering is usually referred to as ____________.

You sold short 200 shares of common stock at $60 per share. The initial margin is 60%. Your initial investment was

Which of the following is true regarding private placements of primary security offerings?