Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please answer the question 1 and 2 and 3 and 4 and 5 please answer all the 5 questions not just one question TRUE/FALSE (3

image text in transcribed

please answer the question 1 and 2 and 3 and 4 and 5

please answer all the 5 questions not just one question

TRUE/FALSE (3 pts) 1 One way to limit the risk of seiling short at $25 is to place a buy-stop 2 A imit order becomes a market order once the market price of the security hits the limit price 3 A risk-averse investor is one who will not assume risk 4. Since dividends are now taxed at the same preferential rato as long-term capital gains, there are no longer tax $28 order at the same time the short sale order is placed advantages which would cause an investor to prefer capital gains over current income Contributions to a Roth IRA can be withdrawn any time without tax liability or penalty Short-selling artificially increases the public supply of the stock which was sold short. 5. 6. 7. When a securities issue is handled on a "firm commitment" basis, the investment banker bears the price risk. 8. Private enterprise is an important characteristic of a capitalist systenm 9. If an investor loses money due to bad advice given by his broker, he can recover his loss from the SIPC 10. Under current tax law, all capital gains that are unrealized at death oscape income taxation due to a "stepped-up" basis 11. One would ordinarily pay more than $100,000 for a $100.000 T-Bill 12. Margin trading tends to magnify losses or gains on a percentage basis 13. Both an OTC market maker and a NYSE specialist take the role of an 'agent in trying to maintain orderly markets in the securities they handle. 14. Listed securities can only be traded on organized exchanges 15. A "sell-stop" order is placed for a price above the current market price when an investor with a long position is trying to limit his/her potential loss. 16. On the average, investors have received higher rates of return for bearing greater risk. 17. An investor's account is subject to a margin call" when the margin percentage in his/her account falls below the required initial margin 18. The SEC vouches for the quality and safety of any new issue which is registered with it. 19. When you have sold stock short, the dollar value of the debt you owe the broker increases as the price of that stock 20. A buy limit $50 order to buy 100 shares of Ford suggests that the investor is willing to pay at most $50 per share of that 21. All joint tenants have the right of survivorship increases stock 22. 23. The bid price represents the price at which the market maker is willing to buy a security Currently dividend and interest income both benefit from the same preferential tax rate that applies to long-term capital gains. 24. Today a stock can be sold short only if its previous price change was a price increase. 25. 26. The 1933 Securities Act defines the term "security very broadly. 27. If you base a trade on information you believe is non-public, you are guilty of a crime regardless of where you got the information or whether you have any personal relationship with the firm whose stock was traded

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Statement Analysis

Authors: Martin S. Fridson, Fernando Alvarez

5th Edition

1119457149, 978-1119457145

More Books

Students also viewed these Finance questions

Question

Develop a program for effectively managing diversity. page 303

Answered: 1 week ago

Question

List the common methods used in selecting human resources. page 239

Answered: 1 week ago