Quiz

aQuiz 2
Chapter 5
Investment Analysis and Portfolio Management
Time :20 minutes
Submission: 10 minutes

Q 1. Price per share Total Market Value

Share O/S Beg. End. Beg. End
Co.A 50M 10 14 500M 700M
Co.B 1M 50 40 50M 40M
Calculate Price and value weighted index for the companies. Calculate percentage changes.

Answer Price index percentage is -10%.. Value weighted index is -83.6%.

Q 2. . Price per Share

Beg. End
P Cement 10M 10 11

D Cement 20M 20 25

Calculate Price and value weighted index for the companies. Calculate percentage changes
Answer: Price raise by 20% value index raise by 22%.

Q3. A firm sells stock for the first time by a (n) ______________ offering.

A. First sale
B. Investment
C. Secondary
D. Initial public
E. Follow-on

Q4. A (n) ____________ specializes in arranging financing for companies by finding security
buyers.

A. Stock exchange
B. Market maker
C. Investment bank
D. Broker
E. Dealer

Q5. A market where previously issued shares are traded between investors is called a ________
market.
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A. Primary
B. Secondary
C. Initial public
D. Underwriter
E. Transfer

Q6. A preliminary prospectus not yet approved by the SEC is a ____________.

A. Notice of intent
B. Red herring
C. Tombstone
D. Initial offering document
E. Letter of commitment

Q7. The document that details a company’s financial position, operations and investments plants
is called a ______________.

A. Prospectus
B. Red herring
C. Tombstone
D. Initial offering document
E. Letter of commitment

Q8. A ___________ buys and sells securities from their own inventory.

A. Broker
B. Commission broker
C. Floor broker
D. Dealer
E. None of the above

Q9. A ____________ arranges security transaction between investors.

A. Dealer
B. Broker
C. Runner
D. Floor trader
E. Market maker

Q10. The price a dealer is willing to pay for a security is called the ____________.

A. Buy price
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B. Sell price
C. Spread
D. Bid price
E. Ask price

Q11. A ____________ arranges security transaction between investors.

F. Dealer
G. Broker
H. Runner
I. Floor trader
J. Market maker

Q12. The difference between the price a dealer will pay for a stock and the price a dealer will sell
a stock is the ____________.

A. Margin
B. Spread
C. Bid price
D. Ask price
E. Offer price

Q13. ___________ executes a customer order to buy or sell stock.

A. Specialist
B. Market maker
C. Member
D. Commission broker
E. All of the above

Q14. The price a dealer is willing to sell a security for is called the ____________.

A. Buy price
B. Sell price
C. Spread
D. Bid price
E. Ask price

Q15. The off-exchange market for securities listed on the exchange is the _________ market.

A. Primary
B. Secondary
C. Third
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D. Fourth
E. Fifth

Q 16. A firm issues new stock to shareholders. The sale will take place in the __________.

A. Primary market
B. Secondary market
C. NYSE
D. NASDAQ
E. AMEX

Q17. The market for exchange listed securities in which investors trade directly with each other
is the ___________ market.

A. Primary
B. Secondary
C. Third
D. Fourth
E. Fifth