24 Free Test Bank for Investments 11th Edition by Mayo

Attempt 24 free test bank for Investments 11th Edition by Mayo multiple choice questions for knowledge mastery of the securities markets, your knowledge gap assessment and understanding the exam pattern. Also, this finance textbook test bank free helps improve your critical thinking, broaden your remembering, understanding, analyzing and applying. That’s why you can expect some real gain after completing this sample. Your practice will also be more effective and smoother as a result of the user friendly design. Just tick the best response to each quiz, and check out answers and score shortly after hitting the handy submit button. Enjoy it, and make sure to review your answers whether they are correct or incorrect for knowledge solidification!

Kindly go to the link below to get full questions and answers:

https://testbank123.com/24-free-test-bank-for-investments-11th-edition-by-mayo-multiple-choice-questions.html

The spread is the

•  a. difference between the bid and ask prices
•  b. commission charged by the broker
•  c. difference between the purchase and sale prices
•  d. difference between the commissions charged by full
•  service and discount brokers

The final prospectus does not include

•  a. the firm's balance sheet
•  b. the price of the securities sold to the public
•  c. the underwriter's profit on the sale
•  d. the underwriting discount

Investors are insured from brokerage firm losses by

•  a. the SEC
•  b. the Federal Reserve
•  c. the SIPC
•  d. the FDIC

The syndicate: 1. facilitates the sale of new securities; 2. is formed by the originating house; 3. creates a secondary market in stocks

•  a. 1 and 2
•  b. 1 and 3
•  c. 2 and 3
•  d. all of the above

If the quote on stock is reduced, that implies: 1. supply exceeded demand; 2. demand exceeded supply; 3. the price was too high; 4. the price was too low

•  a. 1 and 3
•  b. 1 and 4
•  c. 2 and 3
•  d. 2 and 4

Daily securities transactions that are reported in the financial media generally include: 1. the volume of transactions; 2. the high and low prices for the day; 3. the net change in price from the previous day

•  a. 1 and 2
•  b. 1 and 3
•  c. 2 and 3
•  d. all of the above

Short selling is

•  a. selling borrowed securities
•  b. selling stock owned for less than a year
•  c. selling an odd lot
•  d. selling against the investor's broker's advice

The margin requirement is set by the

•  a. Federal Reserve
•  b. SEC
•  c. FDIC
•  d. SIPC

Profits will result from a short sale if

•  a. stock prices rise
•  b. stock prices fall
•  c. stock prices remain stable
•  d. answer is indeterminate

American Depository Receipts represent

•  a. American stocks traded abroad
•  b. European stock traded in Europe
•  c. foreign stocks traded in the U.S.
•  d. American and foreign stocks traded OTC

If a stock is bought on margin,

•  a. part of the cost of investment is borrowed
•  b. the commissions on the investment are increased
•  c. the cost of the investment is reduced
•  d. the interest on the borrowed funds is set by the SEC

Securities regulations protect investors by

•  a. requiring disclosures of information by firms
•  b. stopping investors from buying overpriced stock
•  c. reducing competition among brokers
•  d. establishing commission schedules

A registered representative

•  a. makes a market
•  b. buys and sells for customers' accounts
•  c. represents brokerage firms with the NYSE
•  d. sets the spread

The Sarbanes-Oxley law

•  a. reduces potential conflicts of between securities analysts and investment bankers
•  b. legalizes the sale of securities by investment bankers
•  c. requires corporate boards of directors to own stock
•  d. mandates that securities analysts file their recommendations with the SEC.

Inside information

•  a. is obtained from inside brokerage firms
•  b. is reported in a firm's financial statements
•  c. must be disclosed to the SEC
•  d. may not be legally used to obtain security profits

If the initial offer price of a new issue is too low, : 1. demand will exceed supply; 2. supply will exceed demand; 3. the price of the securities will rise; 4. the price of the securities will fall

•  a. 1 and 3
•  b. 1 and 4
•  c. 2 and 3
•  d. 2 and 4

The cost of investing includes: 1. commissions; 2. the spread; 3. dividends

•  a. 1 and 2
•  b. 1 and 3
•  c. 2 and 3
•  d. all of the above

Which of the following is not part of the underwriting process?

•  a. the prospectus
•  d. the originating house
•  c. the SIPC
•  d. the SEC

Concerning a new issue of stock, a lock-up refers to

•  a. a guaranteed profit on the initial purchase
•  b. a guaranteed profit to the underwriter
•  c. the requirement that shares purchased by insiders prior to an initial public offering must retain those shares for a specified period
•  d. initial buyers of the stock in the IPO must hold the shares for a specified period of time

A new issue of corporate securities sold to the general public must be

•  a. registered with the SEC
•  b. initially sold through brokers
•  c. offered initially to existing stockholders
•  d. bought by specialists in corporate securities

A broker

•  a. stresses one type of investment
•  b. makes a market in securities
•  c. buys securities for customers' accounts
•  d. underwrites stock but not corporate bonds