Chapter 18: Securities
Multiple Choice


1.  

The dollar value assigned to stock for calculating dividends is the ...

market value.
book value.
par value.
trade value


2.  

All shares in a company fall under the category of ...

issued stock.
common stock.
unissued stock.
authorized stock.


3.  

Stock that pays dividends to specific shareholders before common stockholders are paid is ...

Blue-chip stock.
preferred stock.
convertible preferred stock.
none of the above.


4.  

Which of the following is NOT a type of corporate bond?

Secured bonds
General obligation bonds
Debentures
Convertible bonds


5.  

Which of the following is NOT a bond issued by the U.S. Treasury?

Revenue bond
Treasury bill
Treasury note
U.S. savings bond


6.  

Which of the following is NOT a type of institutional investor?

Pension funds
Insurance companies
University students
Banks


7.  

Which of the following is NOT an investment criterion?

Affinity for a particular company
Income and growth
Safety and liquidity
Tax consequences


8.  

IPO shares are sold in the ...

NYSE.
NASDAQ.
primary market.
secondary market.


9.  

NASDAQ is an example of a/n ...

dealer exchange.
auction exchange.
market maker.
ECN.


10.  

Regardless of when, where, or how you trade securities, you must use the services of a ...

stock exchange.
stock specialist.
securities broker.
all of the above.


11.  

An authorization for a broker to buy or sell at the best price that can be negotiated at a particular time is known as a ...

discretionary order.
market order.
limit order.
day order.


12.  

Selling stock borrowed from a broker with the intention of buying it back later at a lower price, repaying the broker, and pocketing the profit is known as ...

margin trading.
market indexing.
day trading.
short selling.


13.  

A stock's current market price divided by the issuer's annual earnings per share is known as ...

price-earnings ratio.
asset allocation.
debenture.
par value.


14.  

To prohibit insider trading, the SEC adopted ...

the fair disclosure regulation.
ECN regulations.
limit order regulations.
all of the above.


15.  

Investment fraud is responsible for ______ in losses to investors.

$10 million annually
$1 million per hour
$100 million annually.
$1 billion annually


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