Jones_Chapter 4 - Sudy Guide - Chapter 4 SECURITIES MARKETS...

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Chapter Four Securities Market 1 Chapter 4 SECURITIES MARKETS Multiple Choice Questions 1. The sale of a new issue of common stock of which there are already shares publicly held is known as: a. an IPO. b. a secondary market issue. c. an EPO. d. a seasoned new issue. (d) 2. In a firm underwriting arrangement, the risk is assumed by the: a. issuer of the security b. investment bankers c. commercial bankers d. institutional investors (b) 3. The ___________ summarizes information about a new security issue. a. syndicate offer b. IPO c. prospectus d. shelf rule (c) 5. A major advantage of private placements over public offerings is: a. greater marketability b. lower interest cost c. elimination of SEC registration d. all of the above
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Chapter Four Securities Market 2 (c) 6. The shelf rule a. became effective in 1933 b. involves securities that are placed directly with financial institutions c. permits qualified companies to file a short form registration d. involves dealer procedures in the OTC market (c) 7. Which exchange member is assigned to a specific trading post? a. Commission broker b. Floor trader c. Specialist d. Dealer (c) 8. A block trade is defined as a transaction involving at least: a. 1,000 shares b. 5,000 shares c. 10,000 shares d. 1 million share (c) 9. A type of trading involving a basket of 15 stocks or more and often used in conjunction with arbitrage strategies is called: a. swapping b. program trading c. day trading d. insider trading (b) 10. A computerized trading network that matches buy and sell orders electronically entered by customers is a: a. National Markets System b. Electronic Communications Networks c. Internet Investment Service d. Global Investment Network
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This note was uploaded on 06/02/2011 for the course FINA 3331 taught by Professor Staff during the Spring '08 term at Texas A&M University, Corpus Christi.

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Jones_Chapter 4 - Sudy Guide - Chapter 4 SECURITIES MARKETS...

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