Stock Market Quiz

You purchase a stock with cash, and you earn a negative return on the stock. If you had purchased the stock with 60 percent cash and 40 percent borrowed funds, your return on your investment would have been

Trading halts are imposed by stock exchanges.

• the SEC.

• brokers.

• stock exchanges.

• the Treasury.

____ are enforced to restrict the amount of credit extended to customers by stockbrokers.

• Limit orders

• Margin requirements

• Maintenance margins

• Initial margins

When investors buy stock with borrowed funds, this is sometimes referred to as

• use of proxy

• purchasing stock on margin

• a margin call

• a margin residual claim

____ offer advice to customers on stocks to buy or sell.

• Full-service brokers

• Discount brokers

• Floor brokers

• Specialists

• Market makers

A ____ is a trading platform on a computer website that allows investors to trade stocks without the use of a broker.

• direct access broker

• program trader

• market maker

• communication network

With a ____ order, the investor specifies a purchase price that is above the current market price.

• market

• limit

• stop-loss

• stop-buy

Trading halts are intended to prevent insider trading.

• True

• False

Trading halts are intended to ensure that the market has complete information before trading on news.

• True

• False

The NYSE defines ____ as the simultaneous buying and selling of a portfolio of at least 15 different stocks that are valued at more than $1 million.

• direct access brokering

• electronic communication networking

• program trading

• regulation of stock trading