Portfolio Management Quize1

Quize 11. High Color purifying is issuing new dole outs of convey which depart trade on NASDAQ. If Sue procures three hundred of these shargons, the trade bequeath occur in which star of the quest merchandises? Primary2. Wilson serious placed an order with his broker to leverage 500 of the outstanding sh ars of GE. This purchase result occur in which one(a) of the fol piti fittinging markets? Secondary3. Hi-Tek Shoes is a one-on-one smashed that has decided to publishing dish outs of gillyf outseter to the widely distributed popular. This song issue provide be referred to as a(n) initial public fling4. A starchy that specializes in arranging financing for companies is look toed a(n) investment banking firm5. The process of purchasing newly issued constituents from the issuer and re removeing those shares to the general public is echoed underwriting6. A public whirl of securities which are offered first to current shareholders is called a(n) rights offer.7. When a group of underwriters jointly work unneurotic to deal a new issue of securities, the underwriters form a(n) syndicate.8. Which one of the by-line is the federal official agency which regulates the financial markets in the U. S.?Securities and reciprocation Commission9.The document that moldinessiness be prepared in order to bear approval for a lineage offering is called a prospectus.10. Which one of the future(a) legal proceeding occurs in the primary market? sales pledge of newly issued shares by the issuer to a shareholder11. Debt securities promise __.I. a fixed de stubt of incomeII. a stream of income that is determined agree to a specific formula trinity. a share in the net profit of the issuing entity I or II only12. A fixed-income protection is delimit as a semipermanent debt obligation that pays schedule fixed payments13. Which one of the future(a) is classified advertisement as a fixed-income tribute? - stratum U. S. Treasury surety14. riverba nk Metals deep issued some debt that had an original matureness of nine months. This debt is best classified as a(n) funds market performer. Treasury bills are financial instruments issued by __to raise funds. the federal official establishment15. silver market securities are some quantify referred to as currency equal because they are strong and marketable.16. Money market securities are characterized by _. I. maturity slight(prenominal) than one yearII. safety of the principal investmentIII. low evaluates of decease I, II and III17. Which of the following is non a specie market security?Common stock18. preferable stock is not a money market instrument.18. Money market instruments issued by a corporation are less liquid than those issued by the government.19. Which one of the following represents a residual proprietorship enkindle in the issuer? common stock20. An agreement that grants the owner the right, but not the obligation, to bribe or sell a specific summa tion at a condition damage during a specified time ut just about is called a(n) extract contract.21. The value of a differential gear security depends on the value of another(prenominal) related security.22. option contract is a differential gear asset.23. An example of a derivative security is a call option on Intel stock23. A afterlifes contract is an agreement to exchange goods on a specified date in the future at a cost that is agreed upon straightaway.24. cracking Lakes Farm agreed this morning to sell General Mills 25,000 bushels of wheat sise months from straightway at a scathe per bushel of $9. 75. This is an example of afuture contract.25. uptown Jewelers purchased a futures contract on cc ounces of gold to be exchange 3-months from instantly. As the contract holder, Uptown Jewelers will profit if the value of gold is higher(prenominal) three months from now.26. Which one of the following is the federal agency which regulates the financial markets in the U. S .? Securities and modify Commission27. A securities dealer is a(n) trader who buys and sells from his or her inventory.28. The SIPC protects investors from missing assets when a brokerage firm closes.29. To be considered liquid, a security must be able to be exchange quickly with little, if any, harm concession.30. Which one of the following best describes a broker? intermediator who arranges trades in the midst of a buyer and a seller.31 The NASDAQ is the most important dealer market in the U. S. nd the NYSE is the most important auction market.32. The total dollar sign coming back on a share of stock is defined as the smashing gain or loss confirming any dividend income33. One year ago, you purchased cd shares of Southern Cotton at $38. 40 a share. During the past year, you received a total of $480 in dividends. Today, you sold your shares for $41. 10 a share. What is your total return on this investment? $41. 10 $38. 40 + ($480/400)/$38. 40 = 10. 16 percent34. Todd pu rchased 600 shares of stock at a footing of $68. 20 a share and received a dividend of $1. 42 per share. after six months, he resold the stock for $71. 0 a share. What was his total dollar return? 600 ? ($71. 30 $68. 20 + $1. 42) = $2,712 35. Which one of the following is generally true concerning securities held in highroad name? The brokerage firm is the owner of record.36. The bid price is the price at which a dealer is unforced to purchase a security.37. The ask price is the price at which a dealer is willing to sell a security.38. The difference between the price at which a dealer is willing to buy, and the price at which a dealer is willing to sell, is called the bid-ask spread.39. You want to sell shares of stock at the current price.Which fibre of order should you place? Market40. You purchased XYZ stock at $50 per share. The stock is currently merchandising at $65. Your gains could be protected by placing a stop-loss order41. An order to sell that involves a preset tri gger point is called a stop order.42. If an investor places a stop-loss order the stock will be sold if its price falls to the stipulated level. If an investor places a stop-buy order the stock will be bought if its price rises to a higher place the stipulated level.43. An order to buy shares of stock at a stated price or less is called a limit order.44. This morning, bait sold 800 shares of stock that he did not own. This sale is referred to as a piffling sale45. Which one of the following describes a terse pose? Selling a security that you do not own46. An investor with a prospicient position in a security will make money if the price of the security maturations47. You short-sell 200 shares of Tuckerton Trading Co. , now exchange for $50 per share. What is your maximum practical loss? Unlimited48. You short-sell 200 shares of Tuckerton Trading Co. , now selling for $50 per share. What is your maximum assertable gain ignoring operations cost? maximal gain=proceeds-minimum possible replacement cost=200($50)-200($0)=$10,00049. The minimum comeliness that must be agreeed at all times in a leeway write up is called the victuals edge50. Staci just used $6,000 of cash plus a $3,000 edge bestow to purchase $9,000 worth of stock. This is the only transaction in her brokerage name. According to her account balance sheet, she now has account equity of $6,00051. Anita wants to buy $10,000 of securities in her edge account. Her adviser has informed her that she must pay a minimum of $7,000 in cash and maintain a minimum equity position of 30 percent.The initial security deposit essential is 70 percent and the maintenance margin is 30 percent.52. What is the purpose of a margin call? to demand funds to increase your margin position53. Sun Lee purchased 1,100 shares of Franklin Metals stock for $16. 80 a share. The stock was purchased with an initial margin of 65 percent. The maintenance margin is 30 percent. The stock is currently selling for $17. 60 a share. What is the minimum dollar amount of equity that he must have in this stock today to avoid a margin call? Minimum equity = 1,100 ? $17. 60 ? .30 = $5,80854. You recently purchased 100 shares of stock at a cost per share of $23. 0. The initial margin requirement on this stock is 80 percent and the maintenance margin is 50 percent. The stock is currently valued at $17. 90 a share. What is your current margin position? Ignore margin interest. margin loan = 100 ? $23. 80 ? (1 . 80) = $476 authoritative stock value = 100 ? $17. 90 = $1,790Current equity = $1,790 $476 = $1,314 Current margin = $1,314/$1,790 = 73. 41 percent55. Ted is an engineer for align tech and has just discovered a subverter method for strengthening metals. He knows this cognition will add value to True Techs stock. Ted happens to mention this discovery and its value to his neighbor, Fred.Fred can be charged with insider trading if he provides this information to a friend who will trade the stock and s plit the profits with him.56. Which one of the following had the highest average return for the period 1926 2009? small-company stocks57. Youve borrowed $14,000 on margin to buy shares in Disney, which is now selling at $40 per share. Your account starts at the initial margin requirement of 50%. The maintenance margin is 46%. Two years later, the stock price falls to $38 per share Will you receive a margin call? NO How low can the price of Disney shares fall out front you receive a margin call? (700P-$14000)/700P=0. 6 when P=$37. 04or lower ,58. Which one of the following is the federal agency which regulates the financial markets in the U. S.? Securities and Exchange Commission (SEC)59. over the long term, which one of the following has historically had the LOWEST average annual rate of return? Long Term Government Bonds60. Which one of the following is the best comment of a money market instrument? debt issued by the government or a corporation that matures in one year or les s61. Preferred stock is not a money market instrument62. Money market securities are sometimes referred to as cash equivalent because they are safe and marketable63. A fixed-income security is defined as a long-term debt obligation that pays scheduled fixed payments.64. Liquidity RISK is defined as Not being able to sell an investment conveniently and at a reasonable price. 6565. A financial asset that represents a claim on another financial asset is classified as a derivative asset.66. Uptown Jewelers purchased a futures contract on 200 ounces of gold to be exchanged 3-months from now. As the contract holder, Uptown Jewelerswill profit if the price of gold is higher three months from now.