Chap003_Text bank(1)_Solution - Chapter 03 How Securities...

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Chapter 03How Securities are TradedMultiple Choice Questions3. Firms raise capital by issuing stock A. in the secondary market.B.in the primary market.C. to unwary investors.D. only on days when the market is up.E. C and D. Funds from the sale of new issues flow to the issuing corporation, making this a primary market transaction.
Difficulty: Easy4. The following statements regarding the specialist are true:
Difficulty: Moderate7. The secondary market consists of
Difficulty: Moderate
8. The use of the Internet to trade and underwrite securities
Difficulty: Moderate9. Initial margin requirements are determined by A. the Securities and Exchange Commission.B.the Federal Reserve System.C. the New York Stock Exchange.D. B and C.E. A and BThe Board of Governors of the Federal Reserve System determines initial margin requirements. The New York Stock Exchange determines maintenance margin requirements on NYSE-listed stocks; however, brokers usually set maintenance margin requirements above those established by the NYSE.
Difficulty: Moderate10. You purchased JNJ stock at $50 per share. The stock is currently selling at $65. Your gains may be protected by placing a __________.
Difficulty: Moderate

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