Question 1

What is the Nasdaq National Market System?

Accepted Answer

The Nasdaq/NMS, which is a com...

Question 2

What are the major similarities and differences between a specialist and a
dealer?

Accepted Answer

Both have their own inventory of selecte...

Question 3

What is the difference between a seasoned new issue and an initial public offering?

Accepted Answer

A seasoned new issue is the sa...

Question 4

The ___________ summarizes information about a new security issue.

Accepted Answer

A)   syndicate offer
B)   IPO
C)   prospectus
D)   shelf ruleE) C) and D)
F) A) and C)

Question 5

Some OTC stocks are traded through the:

Accepted Answer

A)   Blue Sheets.
B)   Red Sheets.
C)   Pink Sheets
D)   Green Sheets.E) None of the above
F) A) and C)

Question 6

Automatic Shelf Registration refers to the practice of allowing:

Accepted Answer

A)   well-seasoned issuers to file shelf registration statements with the SEC that become effective immediately, or the filing of a "base prospectus," enabling efficient stock issue
B)   well-seasoned issuers to file shelf registration statements with the SEC that become effective immediately, or the filing of a "base prospectus," enabling efficient debt issue
C)   well-seasoned issuers to file shelf registration statements with the SEC that become effective immediately, or the filing of a "base prospectus," enabling efficient stock or debt issue
D)   well-seasoned issuers to file shelf registration statements with the SEC that become effective immediately upon filing of a "red herring prospectus," enabling efficient stock or bond issueE) C) and D)
F) B) and D)

Question 7

Why do the DJIA and the S&P 500 have a high correlation?

Accepted Answer

Because both are cal...

Question 8

Investment bankers are compensated by:

Accepted Answer

A)   the underwriting spread
B)   commissions paid by the buyers of the security
C)   commission paid by the sellers of the security
D)   guaranteed investment contractsE) A) and C)
F) B) and D)

Question 9

An NYSE Euronext market maker awaits news of a major merger involving one of the stocks he/she makes a market in. Why does he/she set the bid-ask spread higher?

Accepted Answer

Insiders who have kn...

Question 10

The yields on corporate bonds issued in the primary market should be___________the yields on similar corporate bonds trading in the secondary market.

Accepted Answer

A)   much less than
B)   exactly the same as
C)   slightly higher than
D)   similar toE) A) and C)
F) A) and D)

Question 11

Which of the following is not true regarding the NYSE Amex?

Accepted Answer

A)   It specializes in technology and biotech stocks
B)   It trades only ETFs
C)   It specializes in small- and mid-cap stocks
D)   It is an Over-the-Counter (OT
C)   marketE) A) and C)
F) All of the above

Question 12

A type of trading involving a basket of 15 stocks or more and often used in conjunction with arbitrage strategies is called:

Accepted Answer

A)   swapping
B)   program trading
C)   day trading
D)   insider tradingE) B) and D)
F) All of the above

Question 13

Investment bankers operate in the:

Accepted Answer

A)   primary market
B)   secondary market
C)   tertiary market
D)   fourth marketE) A) and D)
F) All of the above

Question 14

What impact does the increasing amount of institutional investing have on securities markets today and what role do you think institutional investors will play in the future?

Accepted Answer

Institutional investors definitely incre...

Question 15

The largest electronic screen-based equity securities market in the U.S. is known as:

Accepted Answer

A)   Pink Sheets
B)   Instinet
C)   Amex
D)   NASDAQE) B) and D)
F) C) and D)

Question 16

Which of the following statements regarding the Nasdaq Stock Market is not true?

Accepted Answer

A)   It was less affected by the 2000-2002 market decline than the NYSE
B)   NASDAQ dealers make a market by standing ready to buy and sell securities
C)   Stocks listed on the NYSE may also trade on NASDAQ
D)   NASDAQ's electronic trading system provides instantaneous transactionsE) None of the above
F) All of the above

Question 17

A large public offering is often handled by a syndicate of investment banking firms, with one lead managing underwriter.

Accepted Answer

A) True 
 B)False

Question 18

A computerized trading network that matches buy and sell orders electronically entered by customers is a:

Accepted Answer

A)   National Markets System
B)   Electronic Communications Network
C)   Internet Investment Service
D)   Global Investment NetworkE) None of the above
F) A) and B)

Question 19

The fastest growing region in the world is:

Accepted Answer

A)   Western Europe.
B)   Latin America.
C)   Eastern Europe.
D)   the Far East.E) A) and B)
F) A) and C)

Question 20

Orders on Nasdaq come from market makers, ECNs and on-line brokers.

Accepted Answer

A) True 
 B)False

Exam 4: Securities Markets Matter to All Investors

What impact does the increasing amount of institutional investing have on securities markets today and what role do you think institutional investors will play in the future?

Correct AnswerverifiedInstitutional investors definitely incre...View AnswerShow Answer

Investment bankers operate in the:

Correct AnswerverifiedShow Answer

A large public offering is often handled by a syndicate of investment banking firms, with one lead managing underwriter.

Correct AnswerverifiedShow Answer

What are the major similarities and differences between a specialist and a dealer?

Correct AnswerverifiedBoth have their own inventory of selecte...View AnswerShow Answer

Investment bankers are compensated by:

Correct AnswerverifiedShow Answer

The largest electronic screen-based equity securities market in the U.S. is known as:

Correct AnswerverifiedShow Answer

A computerized trading network that matches buy and sell orders electronically entered by customers is a:

Correct AnswerverifiedShow Answer

Some OTC stocks are traded through the:

Correct AnswerverifiedShow Answer

What is the difference between a seasoned new issue and an initial public offering?

Correct AnswerverifiedA seasoned new issue is the sa...View AnswerShow Answer

The fastest growing region in the world is:

Correct AnswerverifiedShow Answer

The yields on corporate bonds issued in the primary market should be___________the yields on similar corporate bonds trading in the secondary market.

Correct AnswerverifiedShow Answer

Why do the DJIA and the S&P 500 have a high correlation?

Correct AnswerverifiedBecause both are cal...View AnswerShow Answer

Which of the following is not true regarding the NYSE Amex?

Correct AnswerverifiedShow Answer

Orders on Nasdaq come from market makers, ECNs and on-line brokers.

Correct AnswerverifiedShow Answer

An NYSE Euronext market maker awaits news of a major merger involving one of the stocks he/she makes a market in. Why does he/she set the bid-ask spread higher?

Correct AnswerverifiedInsiders who have kn...View AnswerShow Answer

What is the Nasdaq National Market System?

Correct AnswerverifiedThe Nasdaq/NMS, which is a com...View AnswerShow Answer

Automatic Shelf Registration refers to the practice of allowing:

Correct AnswerverifiedShow Answer

The ___________ summarizes information about a new security issue.

Correct AnswerverifiedShow Answer

A type of trading involving a basket of 15 stocks or more and often used in conjunction with arbitrage strategies is called:

Correct AnswerverifiedShow Answer

Which of the following statements regarding the Nasdaq Stock Market is not true?

Correct AnswerverifiedShow Answer

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Institutional investors definitely incre...
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Both have their own inventory of selecte...
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Correct Answer
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A seasoned new issue is the sa...
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Correct Answer
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Correct Answer
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Because both are cal...
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Correct Answer
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Insiders who have kn...
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The Nasdaq/NMS, which is a com...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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