Question 1

Assume you sell short 1,000 shares of common stock at $35 per share, with initial margin at 50%.What would be your rate of return if you repurchase the stock at $25 per share The stock paid no dividends during the period, and you did not remove any money from the account before making the offsetting transaction.

Accepted Answer

A)  20.47%
B)  25.63%
C)  57.14%
D)  77.23%E) A) and B)
F) None of the above

Question 2

NASDAQ subscriber levels

Accepted Answer

A)  permit those with the highest level, 3, to "make a market" in the security.
B)  permit those with a level 2 subscription to receive all bid and ask quotes, but not to enter their own quotes.
C)  permit level 1 subscribers to receive general information about prices.
D)  include all OTC stocks.
E)  permit those with the highest level, 3, to "make a market" in the security; permit those with a level 2 subscription to receive all bid and ask quotes, but not to enter their own quotes; and permit level 1 subscribers to receive general information about prices.F) All of the above
G) A) and B)

Question 3

You purchased JNJ stock at $50 per share.The stock is currently selling at $65.Your gains may be protected by placing a

Accepted Answer

A)  stop-buy order.
B)  limit-buy order.
C)  market order.
D)  limit-sell order.
E)  None of the optionsF) A) and C)
G) A) and E)

Question 4

Assume you sell short 100 shares of common stock at $30 per share, with initial margin at 50%.What would be your rate of return if you repurchase the stock at $35 per share The stock paid no dividends during the period, and you did not remove any money from the account before making the offsetting transaction.

Accepted Answer

A)  -33.33%
B)  -25.63%
C)  -57.14%
D)  -77.23%E) A) and B)
F) C) and D)

Question 5

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

Accepted Answer

A)  Limit-buy order
B)  Discretionary order
C)  Limit-sell order
D)  Stop-buy order
E)  Market orderF) B) and E)
G) A) and B)

Question 6

You sold short 300 shares of common stock at $55 per share.The initial margin is 60%.At what stock price would you receive a margin call if the maintenance margin is 35%

Accepted Answer

A)  $51.00
B)  $65.18
C)  $35.22
D)  $40.36E) A) and B)
F) A) and C)

Question 7

Firms raise capital by issuing stock

Accepted Answer

A)  in the secondary market.
B)  in the primary market.
C)  to unwary investors.
D)  only on days when the market is up.E) All of the above
F) None of the above

Question 8

When stocks are held in street name

Accepted Answer

A)  the investor receives a stock certificate with the owner's street address.
B)  the investor receives a stock certificate without the owner's street address.
C)  the investor does not receive a stock certificate.
D)  the broker holds the stock in the brokerage firm's name on behalf of the client.
E)  the investor does not receive a stock certificate and the broker holds the stock in the brokerage firm's name on behalf of the client.F) D) and E)
G) B) and C)

Question 9

Which of the following orders is most useful to short sellers who want to limit their potential losses

Accepted Answer

A)  Limit order
B)  Discretionary order
C)  Limit-loss order
D)  Stop-buy orderE) C) and D)
F) A) and D)

Exam 3: How Securities Are Traded

You sold short 300 shares of common stock at $55 per share.The initial margin is 60%.At what stock price would you receive a margin call if the maintenance margin is 35%

Correct Answer
verified

Correct Answer
verified

Firms raise capital by issuing stock

Correct Answer
verified

You purchased JNJ stock at $50 per share.The stock is currently selling at $65.Your gains may be protected by placing a

Correct Answer
verified

NASDAQ subscriber levels

Correct Answer
verified

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

Correct Answer
verified

When stocks are held in street name

Correct Answer
verified

Which of the following orders is most useful to short sellers who want to limit their potential losses

Correct Answer
verified

Correct Answer
verified

Exam 3: How Securities Are Traded

You sold short 300 shares of common stock at $55 per share.The initial margin is 60%.At what stock price would you receive a margin call if the maintenance margin is 35%

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Firms raise capital by issuing stock

Correct AnswerverifiedShow Answer

You purchased JNJ stock at $50 per share.The stock is currently selling at $65.Your gains may be protected by placing a

Correct AnswerverifiedShow Answer

NASDAQ subscriber levels

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When stocks are held in street name

Correct AnswerverifiedShow Answer

Which of the following orders is most useful to short sellers who want to limit their potential losses

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified