Trading Markets

A securities firm does a trade for a customer and charges a commission. In what capacity did the firm act? A. Agent B. Dealer C. Principal D. Market Maker

A. Agent

Quotes from all market centers in NYSE listed securities are found on (the): A. CQS (Consolidated Quotations Service) B. UQDF (UTP Quote Data Feed) C. ADF (Alternate Display Facility) D. Pink Sheets

A. CQS (Consolidated Quotations Service)

Which of the following is reported on Form 1099-DIV? A. Cash dividends B. Stock dividends C. Stock splits D. All of the above

A. Cash dividends

Trades of NYSE-listed securities that take place in all markets are consolidated and reported through the: A. Network A Tape B. Network B Tape C. Network C Tape D. Network D Tape

A. Network A Tape

A bond trade takes place at 10:00 AM on Monday, July 10th for "cash." Settlement takes place: A. before 2:30 PM on July 10th B. before 2:30 PM on July 11th C. during business hours on July 15th D. during business hours on July 17th

A. before 2:30 PM on July 10th

A customer wants to buy a stock that is very liquid and wants an immediate execution. The order type that should be placed is a: A. market order B. limit order C. stop order D. not held order

A. market order

Electronic Communications Networks: A. match customer orders solely on an agency basis B. fill customer orders on a principal or agency basis C. charge a flat 1% sales charge for the successful execution of each order D. earn a spread for the successful execution of each order

A. match customer orders solely on an agency basis

An individual buys stock at $40 per share. Many years later, the individual dies when the market value is $60. The estate distributes the shares to a beneficiary when the stock is worth $70. What is the cost basis to the beneficiary? A. $40 B. $60 C. $65 D. $70

B. $60

A member firm receives a large block order to buy 100,000 shares of XYZ stock, which is not actively traded. Which customer(s) of the firm can buy XYZ stock prior to the filling of the block trade? A. The registered representative who received the order B. Other customers of the firm who place buy orders, if the firm has information barriers in place C. Any customer of the firm who places an unsolicited order D. No customer can buy the stock until the block order to buy is filled

B. Other customers of the firm who place buy orders, if the firm has information barriers in place

Which of the following is NOT part of the Secondary Market? A. First Market B. Primary Market C. Second Market D. Third Market

B. Primary Market

An order ticket to sell 100 shares of ABC short means that the seller will: A. deliver shares that are owned on settlement date B. deliver shares that are borrowed on settlement date C. not deliver shares on settlement date, but will deliver a due bill instead D. not deliver shares on settlement date, but will deliver the shares on a future date

B. deliver shares that are borrowed on settlement date

If a stockholder wishes to receive a common dividend, that person must sell the stock in a regular way trade no earlier than the: A. business day prior to the ex date B. ex date C. business day following the ex date D. record date

B. ex date

Stocks that are listed on the New York Stock Exchange can also typically be listed and traded on: A. the American Stock Exchange (NYSE American) B. the Chicago (Midwest) Stock Exchange C. the Chicago Board Options Exchange D. Instinet

B. the Chicago (Midwest) Stock Exchange

The "after hours" market is characterized by: A. Narrow Spreads and Low Trading Volume B. Narrow Spreads and High Trading Volume C. Wide Spreads and Low Trading Volume D. Wide Spreads and High Trading Volume

C. Wide Spreads and Low Trading Volume

A customer holds 1,000 shares of ABC stock valued at 80 in a margin account. The debit balance in the account is $35,000. ABC declares and pays a 20% stock dividend. The tax consequence of the distribution to the investor will be: A. portfolio income when received B. capital gain when received C. reduction of cost basis per share D. passive income at time received

C. reduction of cost basis per share

In January, 20XX a customer buys 100 shares of ABC stock at $30 per share and pays a $1 commission per share. The customer receives $1 in cash dividends during the year. The customer's cost basis in the stock is: A. $29 per share B. $30 per share C. $31 per share D. $32 per share

C. $31 per share

A customer places an order to sell bonds. The order reads "Sell 5M ABC 9s M '45 @ 90 GTC." At which of the following prices may the order be executed? A. 90 or lower B. 90 only C. 90 or higher D. 90 minus a $.45 mark-down

C. 90 or higher

Which orders, if executed, guarantee a specific price or better? A. Market Orders B. Buy Stops only C. All Limit Orders D. All Stop orders

C. All Limit Orders

What entity was created to provide clearing and settlement efficiencies by immobilizing securities and to make "book entry" changes to ownership of securities? A. FRB B. OCC C. DTC D. PSA

C. DTC

ABC corporation has set the record date for a cash dividend at July 17th. The last day to buy the stock before it goes ex dividend is: A. July 11th B. July 12th C. July 15th D. July 16th

C. July 15th

Which information is NOT on an order ticket? A. Order size B. Duration of order C. Price of the transaction if it is a market order D. Name of security

C. Price of the transaction if it is a market order

A client believes that XYZZ stock has topped out in price and is ready for a steep drop. What recommendation would give the customer the smallest profit if this occurs? A. Buy an XYZZ put option B. Sell short XYZZ stock C. Sell an XYZZ call option D. Buy 1 XYZZ warrant

C. Sell an XYZZ call optio

Which statements is TRUE about an order to: Buy 100 ABC @ 50 Stop 53 Limit? A. The order is elected at $50 or lower executed at $53 or higher B. The order is elected at $50 or lower and executed at $53 or lower C. The order is elected at $50 or higher and executed at $53 or lower D. The order is elected at $50 or higher and executed at $53 or higher

C. The order is elected at $50 or higher and executed at $53 or lower

All of the following statements are true regarding stop orders EXCEPT: A. stop orders can protect a profit on a long stock position B. stop orders can limit a loss on a long stock position C. stop orders allow a specific execution price to be "locked-in" D. stop orders are placed "away" from the current market

C. stop orders allow a specific execution price to be "locked-in"

The First Market is the: A. trading of OTCBB stocks B. issuance of listed stocks C. trading of listed stocks on the floor of an exchange D. issuance of listed and unlisted stocks

C. trading of listed stocks on the floor of an exchange

The trading of securities directly between institutions in the over the counter market via ECNs occurs in which venue? A. First Market B. Second Market C. Third Market D. Fourth Market

D. Fourth Market

A corporation declares a dividend of $3.00 on Tuesday, December 6th. The record date is set at Friday, December 30th, with the dividend payable on January 6th. Based on this information, the ex date is set at December 28th. For the recipient of the dividend, the "tax event" occurs on: A. December 6th B. December 26th C. December 30th D. January 6th

D. January 6th

All of the following can result in the establishment of a short position EXCEPT: A. Arbitrage transaction B. Sale of a security "against the box" C. Position trades of borrowed shares D. Selling a long position

D. Selling a long position

All of the following information must be shown on a municipal bond trade confirmation EXCEPT: A. Name, address, and telephone number of the municipal dealer B. Whether the trade was effected on an agency or principal basis C. Whether the bond was a General Obligation or a Revenue bond D. The name, address, and telephone number of the underwriter for the initial bond offering

D. The name, address, and telephone number of the underwriter for the initial bond offerin

Retail member firms that route orders to market makers in return for compensation earn: A. mark-ups B. mark-downs C. commissions D. payments for order flow

D. payments for order flow