1)Which one of the following statements about margin trading is correct? Select one: a. Purchasing stocks on margin is less risky than purchasing stocks by paying cash for the entire purchase. b. If Fred buys $1,000 worth of stock using 60% margin, he will need to pay $400 in cash to make the purchase. c. The investor will receive a margin call when the amount in the margin account touches the maintenance margin level. d. Margin trading increases the potential profits while lowering the potential losses on a percentage basis.

2)Which of the following(s) is not true? The standard deviation of returns of: I. small capitalization stocks is higher than that of large capitalization stocks. II. corporate bonds is higher than that of Treasury bills. III. large capitalization stocks is higher than that of corporate bonds. Select one: a. I and II only b. None of the options. c. II and III only d. I, II and III

3)A stock with a beta of 0.85 would be expected to: Select one: a. increase in returns 15% slower than the market in up markets. b. increase in returns 85% faster than the market in up markets. c. increase in returns 15% slower than the market in down markets. d. increase in returns 85% faster than the market in down markets.

4)

Maggie places a good-'til-canceled limit order to buy 500 shares of WH at $21 a share. When her order reaches the trading floor, WH is trading at $19.70. Which of the following statements is true concerning Maggie's order?

Select one:

a. The order will be executed at $19.70 with the proceeds credited to Maggie's account.

b. The brokerage firm will sell the 500 shares at $21 and keep the additional $0.30 as a commission.

c. The specialist will record the order in the order book and execute the trade as soon as the price hits $21.00.

d. The trade will not be executed and will be immediately cancelled.

Clear my choice

5)

Which of the following statement(s) is true regarding shelf registration? Shelf registration: I. is a way of placing issues in the OTC market. II. causes firms to require services of the investment banker more frequently. III. lowers transaction costs to the issuing firm. IV. is a way of placing issues in the primary market and allows firms to register securities for sale over a two-year period.

Select one:

a. II and III

b. I, II and IV.

c. III and IV

d. I and II