ch09 - Section Three Test Bank Chapter 9 Securities Markets...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Section Three Test Bank Chapter 9 Securities Markets TRUE-FALSE QUESTIONS F 1. The primary market is a market in which securities are traded among investors. T 2. The issuer has no price risk in a firm commitment offering once the offer price is set. T 3. All public offerings are regulated by the Securities and Exchange Commission (SEC). T 4. Under a best-effort agreement, investment bankers try to sell the securities of the issuing corporation, but they assume no risk for a possible failure of the flotation. F 5. Shelf registration allows firms to register only debt issues with the SEC, and have them available to sell for two years. F 6. All firms can use shelf registration which saves issuers both time and money. F 7. Private placement can avoid SEC registration and all SEC regulations. T 8. Rights offerings among public corporations became infrequent in the United States during the 1980s and 1990s. F 9. The flotation costs of an initial public offering are comprised solely of direct costs and the spread. F 10. IPO under pricing occurs only in the United States. T 11. Firm commitment flotation costs are typically lower than those of best efforts. F 12. An important function of the Securities and Exchange Commission is to pass judgment on the investment merit of a security. F 13. A dealer is a person who assists in the trading process by buying or selling securities in the market for an investor. 230 Section Three Test Bank T 14. The Glass-Steagall Act of 1933 ended the ability of commercial banks to act as underwriters of newly issued securities. T 15. The secondary markets provide pricing information and liquidity to investors. F 16. Floor brokers act as agents to execute customers orders for securities purchases and sales. T 17. Spets are assigned dealers who have the responsibility of making a market in an assigned security. F 18. All securities must be listed before they may be traded on the American Stock Exchange and regional exchanges. F 19. A limit order is an order to sell stock at the market price when the price of the stock falls to a specified level. T 20. The maintenance margin is the minimum margin to which an investment may fall before a margin call is placed. T 21. Program trading is a technique for trading stocks as a group rather than individually, defined as a minimum of at least 15 different stocks with a minimum value of $1 million. F 22. The fourth market is a market for large blocks of listed stocks that operate outside the confines of the organized exchanges. T 23. American depository receipts are receipts which represent foreign shares to U.S. investors. T 24. Insider trading regulation is provided for under the Securities Exchange Act of 1934....
View Full Document

This note was uploaded on 11/01/2011 for the course ACC 200 taught by Professor Minliu during the Spring '11 term at Universidad Europea de Madrid.

Page1 / 17

ch09 - Section Three Test Bank Chapter 9 Securities Markets...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online