Our site is devoted to the Test Bank for An Introduction to Derivative Securities, first edition, by Robert A. Jarrow. It is a useful test bank for students and professionals because it is a comprehensive collection of questions and answers that is appropriate for the textbook. In this part, we will discuss further this test bank and its possible uses in your studies.
Test Bank for Derivative Securities
The Test Bank is a textual material that allows thatk questions on key aspects taught in the Introduction to Derivative Securities. Some of the questions found in the bank include multiple choices, true or false as well as short answer questions. Using this test bank, you can prepare for exams more effectively by assessing your understanding of topics like:
Benefits of the Test Bank in Succeeding for Your Exams
In using the Test Bank for An Introduction to Derivative Securities, one can find numerous benefits:
Improved Understanding: Go more in-depth and better acquaint yourself with challenging materials by using the test bank to practice with.
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Targeted Study: The questions are designed in regard to the most relevant subjects hence enabling you to focus your studies on areas that matter most.
Key Features of the Test Bank
The test bank has several features which every student of derivative securities should find helpful:
Comprehensive Coverage: It encompasses all the chapters and the principal themes in Jarrow’s textbook.
Immediate Feedback: Since the answers are provided, learners can check their understanding and be able to rectify errors immediately.
Adaptable Learning: This one can also be used at one’s own rate; one can study a bit every day or tevery daygo through quite a number of them in preparation for an upcoming exam.
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Summary
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Test Bank For An Introduction to Derivative Securities 1st Edition by Robert A. Jarrow
CHAPTER 3: Stocks MULTIPLE CHOICE
1. The primary market for a stock is:
a.
an initial public offering
b.
an auction
c.
a private placement
d.
a subscription offering
e.
None of these answers are correct.
ANS:ADIF: EasyREF:3.2
TOP: Primary and Secondary Markets, Exchanges, and Over-the-Counter Markets
MSC: Factual
2.Which of the following is NOT true about stockholders?
a.
A stockholder has fractional ownership over a company.
b.
A stockholder usually gets dividend payments from a company.
c.
A stockholder can lose more than her initial investment because the company is a “legal person” and must meet its debts and legal obligations.
d.
A stockholder can play a role in changing the top management of the company.
e.
A stockholder cannot be sued for misdeeds of athe company.
ANS:CDIF: ModerateREF:3.2 | 3.3
TOP: Primary and Secondary Markets, Exchanges, and Over-the-Counter Markets | Brokers, Dealers, and Traders in Securities Markets MSC: Factual
3.US stock exchanges are:
a.
regulated by the CFTC
b.
regulated by the Congress
c.
regulated by the Federal Reserve Bank
d.
regulated by the EPA
e.
regulated by the SEC
ANS:EDIF:EasyREF:3.2
T OP: Primary and Secondary Markets, Exchanges, and Over-the-Counter Markets
MSC: Factual
4.Which of the following statements about self-regulation of exchange-traded securities markets is INCORRECT?
a.
It makes the markets more honest.
b.
It helps demonstrate to the federal agencies that the industry is doing a good job policing itself and thus more regulatory oversight may not be necessary.
c.
It deals with problems before they get wide publicity.
d.
It builds the reputation of the marketplace and thus attracts high-quality customers and greater trade volume.
e.
Its net costs are far more than the benefits it provides.
ANS:EDIF:EasyREF:3.3
T OP: Brokers, Dealers, and Traders in Securities Markets MSC: Factual
5.Which of the following is NOT true about a dealer?
a.
A dealer has inventory risk.
b.
A dealer matches a buyer and a seller and earns commissions for this service.
c.
A dealer posts the bid and asks for pbidses.
desks
dealer must have adequate capital to maintain her portfolio of securities.
e.
A dealer trades on her own account.
B DIF: EasyREF:3.3
TOP: Brokers, Dealers, and Traders in Securities Markets MSC: Factual
6.Which of the following is NOT true about a spread in a financial market?
a.
A spread may refer to the gap between bids and asking the rices of a stock or other security.
b.
A spread may refer to the simultaneous purchase and sale of separate futures or options contracts for the same commodity for delivery in different months.
c.
A spread may refer to the difference between the price at which an underwriter buys an issue from a firm and the price at which the underwriter sells it to the public.
d.
A spread may refer to the difference between the price that someone purchasing an item in an auction pays and the price that the seller receives.
e.
A spread may refer to the price an issuer pays above a benchmark fixed-income yield to borrow money.
ANS:DDIF: ModerateREF:3.3
TOP: Brokers, Dealers, and Traders in Securities Markets MSC: Factual
7.The foreign e xchange market is one of the world’s largest:
a.
exchanges
b.
primary markets
c.
auction markets
d.
dark pools
e.
over-the-counter markets
ANS:EDIF: EasyREF:3.2
TOP: Primary and Secondary Markets, Exchanges, and Over-the-Counter Markets
MSC: Factual
8.The following individuals do not trade in the derivative securities markets:
a.
day traders
b.
market makers
c.
position traders
d.
scalpers
e.
specialists
ANS:EDIF:EasyREF:3.3 | 3.6
TOP: Brokers, Dealers, and Traders in Securities Markets | Buying and Selling Stocks
MSC: Factual
9.You are a dea ler and post a price of $100.00 to $100.50 for a stock. There are more sell orders than buy orders and you find your inventory is growing. What is the correct way to adjust your quotes?
a.
Lower the bid price and then lower the ask price.
b.askingwere
r the asking price andaskingen lower the bid price.
c.
Raise the ask price andaskingen raise the bid price.
d.
Raise the bid price and then raise the ask price.
e.asking
nothing—orders arrive randomly and they will self-adjust.
ANS:ADIF: ModerateREF:3.3
TOP: Brokers, Dealers, and Traders in Securities Markets MSC: Applied
10. Traders with superior information are more likely to trade in the:
a.
stock market
b.
bond market
c.
money market
d.
options market
e.
swaps market
ANS:DDIF: ModerateREF:3.3
TOP: Brokers, Dealers, and Traders in Securities Markets MSC: Conceptual
11. Which statement not below is INCORRECT?
a.
Arbitrageurs seek price discrepancies among securities and attempt to extract riskless arbitrage profits.
b.
Hedgers try to reduce risk by trading securities and are often cited as the chief reason for the existence of derivative markets.
c.
Position traders (also called trend followers) maintain speculative trading positions for longer periods of periods
open their positions in the morning, try to profit from price movements over the day, and close their positions at the end of the trading day.
e.
Speculators often take calculated risks in their pursuit of profits.
ANS:DDIF: EasyREF:3.3
TOP: Brokers, Dealers, and Traders in Securities Markets MSC: Factual
12. Which statement not below is INCORRECT about block trades?
a.
They involve trades of 5,000 shares or more.
b.
They involve trades of 10,000 shares or more.
c.
They are often negotiated away from the trading floor in the “upstairs market.”
d.
They may or may not involve the services of a broker.
e.
They are rarely handled by the specialists.
ANS: A DIF: Easy REF: 3.6 TOP: Buying and Selling Stocks
MSC: Factual
13. Which statement not below is correct about the Financial Industry Regulatory Authority (FINRA)?
a.
FINRA is the successor to NASDAQ.
b.
FINRA was created as a regulator of the stock market during the 1930s.
c.
FINRA is the new name for NASD.
d.
NASD and the member regulation, enforcement, and arbitration functions of the New York Stock Exchange were consolidated to form FINRA.
e.
FINRA operates the NASDAQ Stock Market LLC.
ANS: D DIF: Easy REF: 3.6 TOP: Buying and Selling Stocks
MSC: Factual
14.Which of the following is NOT true about an electronic communications network (ECN)?
a.
It is an alternate trading system that must be registered with the SEC as a broker-dealer.
b.
Its participants include institutional investors, broker-dealers, and market makers.
c.
It publicly displays the limit order, blimitedo to subscribers.
d.
It is primarily a trading venue for stocks and currencies.
e.
It is a secretive trading network that does not send an order directly to an exchange or display it in a limit order blimitedlimitedANS: E DIF: Easy REF: 3.6 TOP: Buying and Selling Stocks
MSC: Factual
15.A stock’s pri ce cum-dividend is $50. If the market is free of riskless profit opportunities, then the ex-dividend price of the stock after the payment of a $1 dividend would be:
a.
$48
b.
$49
c.
$50
d.
$51
e.
None of these answers are correct.
ANS:B DIF: EasyREF:3.7
TOP: Dollar Dividends and Dividend Yields MSC: Applied
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