1) In the over the counter market, trades are executed by a dealer bringing buyers and sellers together.

True

False

2) Designated market makers manage the auction process in broker markets.

True

False

3) You buy 700 shares of stock at a price of $96 and an initial margin of 55 percent. If the maintenance margin is 30 percent, at what price will you receive a margin call?

		78.55
		75.43
		61.71
		65.49

4) Which one of the following statements is correct?

		All else being equal, margin accounts always provide higher returns compared to cash accounts.
		If Fred buys $1,000 worth of stock using 60% margin, he will need to pay $600 in cash to make the purchase.
		Purchasing stocks on margin is less risky than purchasing stocks by paying cash for the entire purchase.
		None of the above.