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Which of the following quotations are expressions of firm quotes?
Your answer, I and III., was correct!.
A technical analyst has been charting ABC stock and notes that the support/resistance levels are $20 and $30 respectively. If the analyst expects ABC to fall through support, which of the following orders should he enter?A) Sell 100 ABC 19.50 stop. B) Buy 100 ABC 30.25 stop. C) Sell 100 ABC 29.75 stop. D) Buy 100 ABC 20.50 stop.
Your answer, Sell 100 ABC 19.50 stop., was correct!.
The 5% markup policy would apply to all of the following equity transactions EXCEPT:A) agency trade done on an exchange. B) proceeds transaction. C) primary market transaction. D) riskless principal transaction.
A customer places an order to sell short 100 DEF 52.25 STOP. After placing the order, DEF trades as follows: 53, 52.60, 52.20, 52.10, 52.25. Which trade triggers the order?A) 52.6. B) 52.25. C) 52.1. D) 52.2.
Your answer, 52.2., was correct!.
Which of the following orders would be executed in a rising market?
Where might information on penny stocks be found?
A customer has placed an open order to buy 1,600 shares of GHI at $60. GHI declares a 25% stock dividend. On the ex-date, this order is considered a buy limit order for:A) 1,600 shares at $50. B) 1,600 shares at $45. C) 2,000 shares at $60. D) 2,000 shares at $48.
Stock prices in the over-the-counter market are determined by:A) negotiation. B) an auction. C) a competitive bid. D) the 5% markup policy.
The over-the-counter (OTC) market is:A) the first market. B) All of these. C) a negotiated market. D) an auction market.
Your answer, a negotiated market., was correct!.
A buy stop order is triggered when the underlying stock trades:
Your answer, I or III., was correct!.
A quote on Nasdaq is as follows:
Bid Ask 10 10.50, 1300 x 1500
The market maker is obligated to execute all of the following customer transactions in their entirety EXCEPT:
A customer of your broker/dealer is questioning the timeliness in which one of her equity orders for a stock listed on Nasdaq was handled and executed. A source providing the most complete order entry and execution details for the customer’s order could be foundA) at the broker/dealer’s order entry desk B) with the Order Audit Trail System (OATS) C) on the SEC’s Website D) on FINRA’s Website
Your answer, with the Order Audit Trail System (OATS), was correct!.
An immediate-or-cancel order (IOC):
Riskless and simultaneous transactions by a broker/dealer are:A) permissible only if there's profit for a customer. B) not permissible under any circumstances. C) permissible only in new issue underwritings. D) permissible if they comply with the 5% policy.
According to the multi-tiered market making system of NYSE Euronext, a Supplemental Liquidity Provider may:
The Nasdaq stock market permits listing for all of the following EXCEPT:A) convertible bonds. B) common stock. C) warrants. D) nonconvertible debt securities.
A third-market trade involves:A) the trading of NYSE stocks on regional exchanges. B) listed or unlisted stocks traded between institutional investors without the services of a brokerage firm. C) the trading of unlisted stocks between institutional investors. D) listed stocks traded over the counter.
Under the 5% markup policy, which of the following determines the amount of markup in a principal transaction?A) Lowest ask. B) Highest ask. C) Lowest bid. D) Highest bid.
A customer enters an order to buy 1,000 ABC at 50, good for the week only. How will this order appear on the order book?A) Buy 1000 ABC 50 GTW. B) Buy 1000 ABC 50 Day. C) Buy 1000 ABC 50 GTC. D) Buy 1000 ABC 50 GTM.
Which of the following orders is reduced on the order book on the ex-dividend date for a cash dividend?A) Buy stop limit order. B) Sell limit order. C) Limit order to buy. D) Buy stop order.
Your answer, Limit order to buy., was correct!.
Which of the following individuals normally trade on the floor of an exchange?
All of the following statements regarding Nasdaq Level 3 are true EXCEPT that:A) the system shows the inside quote. B) actual interdealer quotes are displayed. C) this level is used by registered representatives only. D) quotes are entered by market makers.
Your answer, this level is used by registered representatives only., was correct!.
A customer sells short 100 shares of XYZ Corporation at $78 per share. The support and resistance levels for XYZ are at $70 and $80, respectively. If he wishes to protect his position, which of the following is the best place to put in a buy stop order?A) 69.85. B) 78.1. C) 80.1. D) 70.1.
Your answer, 80.1., was correct!.
A client asks his broker to enter a day order to buy 100 shares of COW at 36. Later in the day, he changes the order to a GTC order at the same price and for the same number of shares. What happens to the position of the order on the order book?A) It stays in the same position. B) The entire order is canceled until the next trading day. C) It loses its original position. D) It cannot be changed until the next trading day.
An investor places an order to sell short ABCD at the open. The opening bid of 15.25 is the same as the prior day's close. At what price may the investor sell short at the open?A) The investor is prohibited from selling short at the open. B) 15.25. C) 15.24. D) 15.26.
The symbol OPD appearing on the Consolidated Tape System indicates:A) a delayed opening print. B) a cross. C) an execution of a block trade. D) short sale.
Your answer, a delayed opening print., was correct!.
Which of the following would accelerate a decline in a bear market?A) Buy limit. B) Buy stop. C) Sell stop. D) Sell limit.
Each of the following types of orders remains open on the NYSE until certain conditions are met EXCEPT:A) stop orders. B) good-till-canceled orders. C) stop limit orders. D) market orders.
The Three Contact Rule does NOT apply to the purchase or sale of a non-Nasdaq security provided there is at least:A) 3 priced quotations available electronically . B) 1 priced quotation available electronically. C) 2 priced quotations available electronically . D) 4 priced quotations available electronically .
Each of the following statements concerning fill-or-kill orders and all-or-none orders are TRUE except:A) an FOK order must be canceled if the whole order cannot be executed immediately. B) an FOK order must be filled in its entirety. C) an AON order must be filled in its entirety. D) an AON order must be canceled if the whole order cannot be executed immediately.
All of the following kinds of orders may be turned over to the specialist (designated market maker) for execution EXCEPT:A) not-held. B) limit. C) stop. D) market.
Your answer, not-held., was correct!.
If your client has sold 100 shares of GGZ short and places a buy stop order at 80, the order is activated when the price of GGZ:A) rises to 80 or above. B) rises above 80. C) falls below 80. D) falls to 80 or below.
Your answer, rises to 80 or above., was correct!.
To fill a customer buy order for 800 WXYZ shares, your firm requests a quote from a market maker for 800 shares. The response is "bid 15, ask 15.25." If the order is placed, the market maker must sell:A) 800 shares at no more than $15 per share. B) 800 shares at $15.25 per share. C) 100 shares at $15.25 per share. D) 800 shares at $15 per share.
Which of the following events may NOT cause FINRA to terminate quotations in a SmallCap stock?A) FINRA deems termination to be in the public interest. B) Only 2 broker/dealers are making a market in the stock. C) The issuer declares bankruptcy. D) The issuer's independent auditor renders a disclaimer opinion.
Your answer, Only 2 broker/dealers are making a market in the stock., was correct!.
Your client has entered a limit order to buy 600 shares of DMF at $50 per share. DMF declares a 10% stock dividend. How would this order be adjusted on the ex-date?A) 660 shares at $46.50. B) 600 shares at $50. C) 660 shares at $46.37. D) 600 shares at $45.45.
Which of the following orders would NOT be reduced on the order book on the ex-dividend date for a cash dividend?
Your answer, III and IV., was correct!.
Trade reports made to the Consolidated Tape:
A customer sells securities and uses the proceeds to buy more securities at the same cost. Under the 5% markup policy, the markup is calculated on:A) the buy side only. B) the sell side only. C) the total of both sides. D) each side separately.
All of the following statements regarding a market not-held order are true EXCEPT:A) it may be filled a small portion at a time. B) it is given to a specialist (designated market maker). C) it gives the floor broker discretion over the price or time of execution. D) the order ticket must be marked not held.
Which of the following statements regarding the electronic "Pink Sheets" are TRUE?
To narrow the spread between the bid and the asked price of one of his stocks, a specialist enters a bid to buy for his own account, acting in this transaction as a:A) broker/dealer. B) dealer (or principal). C) broker (or agent). D) floor broker.
The over-the-counter market could be characterized as what type of market?A) First. B) Primary. C) Dealer. D) Auction.
A firm 1-sided quote is permitted for:A) Nasdaq Global Select stocks. B) Over-the-counter Bulletin Board stocks. C) Nasdaq Global Market stocks. D) Nasdaq Capital Market stocks.
Priority and precedence rules of bids and offers manage trading activity on the:A) third market. B) OTC market. C) NYSE. D) NYSE and the OTC.
Which of the following orders may be used to acquire a security at a specific price or better?
Your answer, I and II., was correct!.
An agency cross transaction in the OTC market occurs when a broker/dealer:A) matches a customer buy order with a customer sell order on the same stock at the same price and charges each side a mark-up and mark-down, respectively. B) invests the proceeds of a customer sale in another OTC stock. C) matches a customer buy order with a customer sell order on the same stock at the same price and charges each side a commission.
A customer places an order to sell short 100 DEF 52.50 STOP. After placing the order, DEF trades as follows: 53, 52.60, 52.20, 53 SLD, 52.10, 52.25. At which trade can the order be executed?A) 52.25. B) 52.5. C) 52.1. D) 53.
Your answer, 52.1., was correct!.
A customer sells short 1,000 XYZ at 60. Three months later, XYZ is at 44. Which of the following strategies might the customer employ to protect his unrealized gain?
Earlier in the day, you entered a customer order to buy 300 XYZ at 26.45 GTC. By late afternoon, you notice that XYZ is trading at your customer's limit price. At the close of trading, you contact the order desk and get a Nothing Done report because of:A) the normal time delay between execution and execution reports. B) the small size of the order. C) stock ahead. D) the order was canceled at the close of trading.
Sell orders sent to an exchange:A) must be marked long or short. B) must be marked only if they are long sales. C) do not need to be marked, only executed in accordance with the appropriate rules. D) must be marked only if they are short sales.
After-hours trading in large blocks of stock by institutional investors can be accomplished through:A) electronic communications networks (ECNs). B) any regional exchange. C) Nasdaq. D) the intermarket.
Your answer, electronic communications networks (ECNs)., was correct!.
If a customer gives his broker/dealer an order to sell his stock if it falls to or below 69 and will not accept a price below 69, the order is:A) a buy limit order. B) a stop order. C) a sell limit order. D) a stop limit order.
Which of the following can you find on the Level 1 service of Nasdaq?A) Markups. B) Firm bids and offers. C) Inside bids and offers. D) The names of firms making markets.
Traders can sell short:
Your answer, I, II and III., was correct!.
Which of the following orders are reduced on the ex-dividend date for a cash dividend?
You receive a not-held order from a customer who wants you to buy 1,000 shares of ABC when the price is right. Under NYSE rules, this order is a:A) FOK order. B) GTC order. C) day order. D) limit order.
Your answer, day order., was correct!.
On the morning of the ex-date for a cash dividend which of the following orders on the order book will be reduced?A) Sell stop limit. B) Sell stop. C) All of these. D) Buy limit.
If a Nasdaq market maker is selling stock to a customer from inventory and the firm has held the shares to be sold for several months, what price should the dealer use as a basis for a markup?A) Best offering price quoted in the interdealer market. B) Price at which it purchased the securities. C) Offer price shown in the electronic "OTC Pink" on the day of the current sale. D) Broker/dealer's own current offer price.
SEC regulation SHO mandates a locate requirement for short sales that is applicable to
Which of the following order types are available to customers for use in NYSE equity markets?
ABC corporation trading at $80 per share has just bid $50 per share for XYZ corporation, currently trading at $40 per share in a hostile takeover attempt. The most common risk or takeover arbitrage strategy would be toA) buy shares of the target company (XYZ) and short shares of the aggressor (ABC) B) sell shares of the target company (XYZ) C) buy shares of the aggressor company (ABC) D) there can never be an arbitrage opportunity in a hostile takeover scenario
Your answer, buy shares of the target company (XYZ) and short shares of the aggressor (ABC), was correct!.
The Nasdaq market includes securities in the:
Your answer, I and II., was correct!.
Which of the following applies to an open order to buy 600 WXYZ at 44?
Failure to honor a firm quote is called:A) trading ahead. B) backing away. C) interpositioning. D) front running.
Your answer, backing away., was correct!.
A customer enters an order to purchases 1000 shares of XYZ common stock at the market when the quote is 18.22 bid, 18.30 ask. If the transaction is executed at the market and the broker charges a $.10 mark-up how will the price be reported to the consolidated tape system?A) 18.22 B) 18.30 C) 18.40 D) 18.32
Which of the following orders are NOT placed on the order display book?
Your answer, III and IV., was correct!.
A customer tells a broker to buy 1,500 shares of ABCD at 33.60 immediately for the full 1,500 shares. This is a(n):A) immediate-or-cancel order. B) good-till-canceled order. C) all-or-none order. D) fill-or-kill order.
Trading is halted on a listed security on the NYSE because a large volume of orders created an order imbalance. A report of a transaction in the stock taking place on another exchange, will appear on the consolidated tape system (CTS):A) never, because trading is halted on the NYSE. B) None of these. C) as it occurs, despite the trading halt on the NYSE. D) only after trading is resumed on the NYSE.
A fill-or-kill order (FOK)
A customer enters an order to buy GGZ at the close. GGZ traded between 70 and 71 all day. Then, after a last-minute rally, it closed up 4 points at 74. The customer pays the:A) closing price. B) price as near to the close as possible, at the floor broker's discretion. C) opening price the next morning. D) same treatment as if he had placed a not-held order.
Your answer, closing price., was correct!.
The locate requirement for short sales applies to:A) Nasdaq global select and global market securities. B) All of these. C) over-the-counter securities. D) securities traded on the NYSE.
Under NYSE rules, a not-held order:A) is good for the day only. B) requires discretionary authority from the customer. C) is a limit order. D) is good until canceled.
Your answer, is good for the day only., was correct!.
If ALFA Securities, a broker/dealer, is a position-trading firm, which of the following statements is TRUE?A) It is acting as a broker for customers. B) It is violating NYSE rules. C) It is underwriting securities in the primary market. D) It is trading for its own account.
Which of the following terms are associated with over-the-counter trading?
Your answer, I and IV., was correct!.
If a customer with an unrealized gain on a short stock position wishes to protect his profit, he should enter a:A) buy limit order. B) sell stop order. C) sell limit order. D) buy stop order.
When a broker/dealer makes a market, it acts as a(n):A) underwriter. B) broker. C) principal. D) agent.
A customer has entered an option order with your broker/dealer. At which of the following locations could such an order be executed?
Your answer, I, II and III, was correct!.
All open orders must be confirmed to the order book:A) every 6 months after the order has been entered. B) the last business days of April and October. C) once a year on the anniversary of the order. D) April 1 and October 1.
Stock prices in the over-the-counter market are determined by:A) the 5% markup policy. B) buyers and sellers bidding directly against each other in a double auction market. C) open outcry for the securities at a central marketplace. D) negotiation between buyers and sellers.
Your answer, negotiation between buyers and sellers., was correct!.
A significant increase in which of the following types of orders may cause a bull market to accelerate?A) Short sales. B) Sell stops. C) Buy stops. D) Buy limits.
A customer has an order to buy 400 at ABC 60 Stop. ABC declares a 20% stock dividend. On the ex-date, the order in the order book will read:A) buy 400 shares at 50 stop. B) buy 480 shares at 60 stop. C) buy 400 shares at 60 stop. D) buy 480 shares at 50 stop.
If the DJIA declines by 30% before 1:00 pm, Rule 80B requires that the NYSE and Nasdaq close for:A) 2 hours. B) 1 hour. C) the remainder of the day. D) 30 minutes.
All of the following are subject to the 5% markup policy EXCEPT:A) markups. B) commissions. C) spreads in new stock offerings. D) markdowns.
Your answer, spreads in new stock offerings., was correct!.
The 5% markup policy applies to all of the following EXCEPT:A) agency transactions in non-exempt unlisted securities. B) municipal bond transactions. C) principal transactions in the OTC market. D) agency transactions on an exchange.
Your answer, municipal bond transactions., was correct!.
Your broker/dealer has just negotiated a trade with another broker/dealer in a Nasdaq-listed stock. The automated system that will facilitate the reporting of the post-execution data electronically, such as price and volume, to FINRA is known asA) Super Display Book (SDBK) B) Consolidate Tape System (CTS) C) Trade Reporting Facility (TRF) D) the Designated Market Maker (DMM) display book
A customer sold 100 shares of QRS short when the stock was trading at 19. If QRS is now trading at 14, and he wants to protect his gain, which of the following orders should he place?A) Buy stop at 14.25. B) Buy limit at 14. C) Sell stop at 13.75. D) Sell limit at 14.
Your answer, Buy stop at 14.25., was correct!.
A specialist (designated market maker) must refuse:
Your answer, I and II., was correct!.
If a municipal firm purchases a block of municipal bonds in anticipation of a price increase, the firm is engaged in:A) position trading. B) short selling. C) arbitrage. D) hedging.
An order to sell at 38.65 stop limit is entered before the opening. The subsequent trades are 38.85, 38.50, and 38.35. The order:A) has not yet been executed. B) was executed at 38.50. C) was executed at 38.65. D) was executed at 38.85.
Which of the following orders on the order book would be reduced on the ex-date?A) Buy 100 XYZ at 60 stop. B) Sell 100 XYZ at 50 stop. C) Buy 100 XYZ at 50 DNR. D) Sell 100 XYZ at 60.
A customer, concerned about a possible pull-back in XYZ stock, instructs his broker, to "Sell my XYZ stock if it falls to 40, but I don't want less than 39.75 for my shares." The broker should enter a:A) market order to sell. B) sell stop order. C) sell stop limit order. D) sell limit order.
Your answer, sell stop limit order., was correct!.
If a customer places an order to buy 500 ABC at 62 stop limit, after the order is elected, at which of the following prices may the order be executed?
A customer enters an order to buy 100 ABC at 47 stop GTC. After the order is elected, the order may be executed at which of the following prices?
Under FINRA rules, which of the following securities is eligible for listing in the OTC Bulletin Board service (OTCBB)?A) Nonconvertible bond issued by a U.S. corporation that has two stock issues listed on Nasdaq. B) Bond issued by a foreign corporation that has an issue of stock quoted in the OTCBB. C) Stock of a U.S. corporation listed on the Chicago Stock Exchange, but no other. D) Stock of a corporation that has been delisted from the New York Stock Exchange.
Your answer, Stock of a corporation that has been delisted from the New York Stock Exchange., was correct!.
All of the following statements regarding the short sale of a listed security are true EXCEPT:A) short sales may take place at the opening. B) a short sale can be effected at any time in the trade sequence. C) the buyer must be advised that he is purchasing borrowed shares. D) short sales may take place at the closing.
Which of the following describes a quote on Nasdaq Level I?A) Available to traders only. B) Inside market. C) Lowest bid/highest offer. D) Nominal.
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