投资学第7版Test
Bank答案03
本页仅作为文档封面，使用时可以删除
This document is for reference only-rar21year.March
Multiple Choice Questions
1. A purchase of a new issue of stock takes place A) in the secondary market. B) in the primary market. C) usually with the assistance of an investment banker. D) A and B. E) B and C.
Answer: E Difficulty: Easy Rationale: Funds from the sale of new issues flow to the issuing corporation, making
this a primary market transaction. Investment bankers usually assist by pricing the issue and finding buyers.
2. The following statements regarding the specialist are true: A) Specialists maintain a book listing outstanding unexecuted limit orders. B) Specialists earn income from commissions and spreads in stock prices. C) Specialists stand ready to trade at quoted bid and ask prices. D) Specialists cannot trade in their own accounts. E) A, B, and C are all true.
Answer: E Difficulty: Moderate Rationale: The specialists' functions are all of the items listed in A, B, and C. In
addition, specialists trade in their own accounts.
3. Investment bankers A) act as intermediaries between issuers of stocks and investors. B) act as advisors to companies in helping them analyze their financial needs and
find buyers for newly issued securities.
C) accept deposits from savers and lend them out to companies. D) A and B. E) A, B, and C.
Answer: D Difficulty: Moderate Rationale: The role of the investment banker is to assist the firm in issuing new
securities, both in advisory and marketing capacities. The investment banker does not have a role comparable to a commercial bank, as indicated in C.
4. In a \
A) the investment banker buys the stock from the company and resells the issue to
the public.
B) the investment banker agrees to help the firm sell the stock at a favorable price. C) the investment banker finds the best marketing arrangement for the investment
banking firm. D) B and C. E) A and B. Answer: A Difficulty: Moderate
5. The secondary market consists of A) transactions on the AMEX.
B) transactions in the OTC market.
C) transactions through the investment banker. D) A and B. E) A, B, and C.
Answer: D Difficulty: Moderate
Rationale: The secondary market consists of transactions on the organized exchanges and in the OTC market. The investment banker is involved in the placement of new issues in the primary market.
6. The use of the Internet to trade and underwrite securities A) is illegal under SEC regulations.
B) is regulated by the New York Stock Exchange.
C) decreases underwriting costs for a new security issue. D) increases underwriting costs for a new security issue.
E) is regulated by the National Association of Securities Dealers.
Answer: C Difficulty: Moderate
Rationale: The SEC permits trading and underwriting of securities over the Internet, but has required firms participating in this activity to take steps to safeguard
investment funds. This form of underwriting is expected to grow quickly due to its lower cost.
投资学第7版testbank答案03
