Portfolio Management Quize1

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1.High Color Detergent is issuing new shares of stock which will trade on NASDAQ. If Sue purchases 300 of these shares, the trade will occur in which one of the following markets? Primary 2. Wilson just placed an order with his broker to purchase 500 of the outstanding shares of GE. This purchase will occur in which one of the following markets? Secondary 3.Hi-Tek Shoes is a private firm that has decided to issue shares of stock to the general public. This stock issue will be referred to as a(n): initial public offering4. A firm that specializes in arranging financing for companies is called a(n): investment banking firm5.The process of purchasing newly issued shares from the issuer and reselling those shares to the general public is called: underwriting 6. A public offering of securities which are offered first to current shareholders is called a(n): rights offer.7. When a group of underwriters jointly work together to sell a new issue of securities, the underwriters form a(n): syndicate.8. Which one of the following is the federal agency which regulates the financial markets in the U.S.? Securities and Exchange Commission 9. The document that must be prepared in order to receive approval for a stock offering is called a: prospectus. 10.Which one of the following transactions occurs in the primary market? sale of newly issued shares by the issuer to a shareholder11. Debt securities promise __. I. a fixed stream of income II. a stream of income that is determined according to a specific formulaIII. a share in the profits of the issuing entity I or II only 12.A fixed-income security is defined as a long-term debt obligation that pays scheduled fixed payments 13. Which one of the following is classified as a fixed-income security? 2-year U.S. Treasury security 14. Riverside Metals recently issued some debt that had an original maturity of nine months. This debt is best classified as a(n): money market instrument. Treasury bills are financial instruments issued by __to raise funds. the Federal Government15. Money market securities are sometimes referred to as "cash equivalent" because they are safe and marketable. 16. Money Market securities are characterized by _.I. maturity less than one yearII. safety of the principal investmentIII. low rates of return I, II and III 17. Which of the following is not a money market security? Common stock 18. Preferred 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 ownership interest in the issuer? common stock 20. An agreement that grants the owner the right, but not the obligation, to buy or sell a specific asset at a specified price during a specified time period is called a(n) option contract. 21.The value of a derivative security depends on the value of other related security.22. option contract is a derivative asset.23. An example of a derivative security is a call option on Intel stock 23. A futures contract is an agreement: to exchange goods on a specified date in the future at a price that is agreed upon today.24. Great Lakes Farm agreed this morning to sell General Mills 25,000 bushels of wheat six months from now at a price per bushel of $9.75. This is an example of a:future contract.25. Uptown Jewelers purchased a futures contract on 200 ounces of gold to be exchanged 3-months from now. As the contract holder, Uptown Jewelers: will profit if the price of gold is higher 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 Exchange Commission 27. 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 sold quickly with little, if any, price concession. 30.Which one of the following best...
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