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Exam 2: Security Markets

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Question 41

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The investment banker acts as a middleman in the process of raising new funds for corporations and state and local governments.

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Question 42

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Deregulation of financial institutions and mergers has created a more competitive environment for retail brokerage houses.

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Question 43

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There is concern by the SEC and Congress that dark pools create a two-tier market.

Primary markets are for new issues of securities.

One of the main reasons institutional investors like ECNs is that they allow anonymity in trading.

Bringing private companies public for the first time is called an initial public offering.

When an investment bank sells securities on a best efforts basis,it assumes all risk of the offering.

The use of the NASDAQ Automated Quotation System has increased the number of equity trades on the American Stock Exchange.

Creating prices for securities and allowing for liquidity are functions of:

ECNs provide several advantages to investors.Which of the following is not an advantage?

A means of exchanging assets,which may or may not include a specified location,and in which the seller may or may not own the assets being sold,is called:

Which of the following best describes the function of an investment banker selling an issue on a "best efforts" basis?

Why was the Sarbanes-Oxley Act enacted?

A specialist is supposed to maintain an orderly market.

Program trading decreases market efficiency by exaggerating price discrepancies between the cash and futures markets.

As a part of Super Dot,specialists are informed through Opening Automated Report Service (OARS)of market orders received before the opening bell.

One of the functions of a specialist is:

Shelf registration is more popular with new bond offerings than with new stock offerings.

From the investment banker's point of view,the major reason syndicates are formed in the distribution of large issues is for the purpose of:

Secondary markets are for existing securities.