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Question;[i]. Trades on the NYSE are generally completed;by having a brokerage firm acting as a "dealer" buy securities and;adding them to its inventory or selling from its inventory. The Nasdaq, on the other hand, operates as an;auction market, where buyers offer to buy, and sellers to sell, and the price;is negotiated on the floor of the exchange.;a. True;b. False;(2-4) Stock market F H;[ii]. The "over-the-counter" market received;its name years ago because brokerage firms would hold inventories of stocks and;then sell them by literally passing them over the counter to the buyer.;a. True;b. False;(2-5) Stock market transactions F H;[iii]. If you decide to buy 100 shares of Google, you;would probably do so by calling your broker and asking him or her to execute;the trade for you. This would be defined;as a secondary market transaction, not a primary market transaction.;a. True;b. False;(2-5) Stock market transactions F H;[iv]. The term IPO stands for "individual;purchase order," as when an individual (as opposed to an institution);places an order to buy a stock.;a. True;b. False;(2-5) Stock market transactions F H;[v]. In a "Dutch auction" for new stock;individual investors place bids for shares directly. Each potential bidder indicates the price he;or she is willing to pay and how many shares he or she will purchase at that;price. The highest price that permits;the company to sell all the shares it wants to sell is determined, and this is;the "market clearing price." All;bidders who specified this price or higher are allowed to purchase their shares;at the market clearing price.;a. True;b. False;(2-5) Closely held stock F H;[vi]. When a corporation's shares are owned by a;few individuals who are associated with the firm's management, we say that the;stock is closely held.;a. True;b. False;(2-5) Public;company F H;[vii]. A publicly owned corporation is a;company whose shares are held by the investing public, which may include other;corporations as well as institutional investors.;a. True;b. False;(2-6) Stock market returns F H;[viii]. If you wanted to know what rate of return;stocks have provided in the past, you could examine data on the Dow Jones;Industrial Index, the S&P 500 Index, or the Nasdaq Index.;a. True;b. False


Paper#55049 | Written in 18-Jul-2015

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