1. A company wants to issue new common stock to the public.It will go through investment bank that promises the company a specified price.This is an example of a _________________ arrangement.

A. best efforts underwriting

B. firm commitment underwriting

C. position trading

D. pure arbitrage

E. risk arbitrage

2. Glad Investments is trying to sell some AT&T bonds from its own holdings.It bought them two years ago, hoping to profit from a bond price increase. Here, Glad Investments is clearly involved in a(n):

A. private placement

B. program trade

C. agency transaction

D. best efforts transaction

E. principal transaction

3. A professionally managed pool of money directed to the financing of newer, often higher-risk firms in which the investors take equity positions (i.e., are not passive investors) is called a _____________.

A. Arbitrage

B. Discount brokerage

C. Market making

D. Program trading

E. Venture capital

4. You notice that the same security is selling for two different prices on two different exchanges. You buy on the less expensive exchange, immediately selling on the more expensive.This is __________.

A. program trading

B. market making

C. pure arbitrage

D. investment banking

E. electronic brokerage

5. Francis wants to buy 100 shares of Facebook (FB) stock. He places the order with Takeyurdoh Securities, who is acting in the capacity of a(n):

A. broker-dealer

B. position trader

C. principal

D. private placement agent

E. underwriter