Ch. 15 Quiz PFM

D. is a special form of limit order to execute a transaction when the stock price reaches a specified level.

A stop order: A. does not allow brokerage trades. B. is an order to buy or sell a stock when it reaches a specific market price. C. is an order to buy or sell a stock at the current market price. D. is a special form of limit order to execute a transaction when the stock price reaches a specified level.

C. important because there are variations in management skills and firm performance.

An analysis of the firm​ is: A. useful but not really important because all firms report to the Internal Revenue Service. B. useful but not really important because there is little variation in management skills and firm performance. C. important because there are variations in management skills and firm performance. D. important because there are regulations that apply to various firms.

B. standardized financial information that can be used to analyze a​ firm's performance.

An annual report​ contains: A. firm history and management vision. B. standardized financial information that can be used to analyze a​ firm's performance. C. information on all the managers and executives. D. the names of all the employees.

A. gross domestic product.

Economic growth is measured​ using: A. gross domestic product. B. growth domestic production. C. growth domestic product. D. gross domestic production.

B. computer systems that match up desired purchases and sales of stocks.

Electronic Communication Networks​ (ECNs) are: A. networks that link bankers and brokers. B. computer systems that match up desired purchases and sales of stocks. C. federal systems of communications required to be used by all brokers. D. computer systems that match up desired purchases and sales of real property.

A. are used to execute some transactions on the NYSE and NYSE MKT LLC.

Electronic Communication​ Networks: A. are used to execute some transactions on the NYSE and NYSE MKT LLC. B. make up​ 80% of all trading of NASDAQ stocks. C. can only be used while the exchange is open. D. allow brokers to recoup​ fees, avoiding transaction costs.

C. increases stock prices.

Higher economic​ growth: A. increases the volatility of stock prices. B. does not affect stock prices. C. increases stock prices. D. decreases stock prices.

B. Investors analyze all relevant information about a firm and its prospects and then decide how this information will impact demand and supply and therefore price.

How do investors use this information to make buy or sell​ decisions? A. Investors analyze all relevant information about a firm and its prospects and then decide how this information will impact investors and financial institutions and therefore price. B. Investors analyze all relevant information about a firm and its prospects and then decide how this information will impact demand and supply and therefore price. C. Investors analyze the stock market as a whole and then decide how this information will impact demand and supply and therefore price of a particular stock. D. Investors analyze all relevant information about a firm and its geographical location and then decide how this information will impact demand and supply and therefore price.

C. be negatively affected.

If the U.S.​ government's fiscal policy involves raising​ taxes, corporate earnings​ will: A. not be affected. B. be positively affected. C. be negatively affected. D. be affected in an unpredictable way.

C. consumer price index.

Inflation is measured by​ the: A. consumer purchase index. B. calculated purchase index. C. consumer price index. D. calculated price index.

B. an increase in the general level of prices of products and services over a specific period.

Inflation​ is: A. a change in the general level of prices of products and services over a specific period. B. an increase in the general level of prices of products and services over a specific period. C. an increase in the level of stock prices over a specific period. D. a change in the level of stock prices over a specific period.

1. A. brokerage 2. B. buy and sell 3. A. floor traders

Investors who trade stock have accounts at a ________ 1. A. brokerage B. investment firm. To buy or sell a stock listed on the​ NYSE, the investor contacts the brokerage​ firm, which electronically sends the request to buy or sell to the NYSE. There a computer matches up _______ 2. A. buy and exchange B. buy and sell C. exchange and sell orders and communicates the executed order to the brokerage firm. In the traditional​ method, which is still used for some​ transactions, the brokerage firm submits a message to one of its _________ 3. A. floor traders B. specialists who negotiates a price with another trader who is trying to sell or buy the stock. Once the trade is​ complete, the floor trader sends a confirmation to the​ brokerage, which forwards it to the investor.

B. Opening stock​ price, closing stock​ price, price range over the past​ year, dividend​ yield, and​ price-earnings ratios are just some of the information contained in a stock quotation.

List some of the information contained in a typical stock quotation from a financial website. A. Opening stock​ price, closing stock​ price, price range over the past five​ years, yield to​ maturity, and​ price-earnings ratios are just some of the information contained in a stock quotation. B. Opening stock​ price, closing stock​ price, price range over the past​ year, dividend​ yield, and​ price-earnings ratios are just some of the information contained in a stock quotation. C. Opening stock​ price, closing stock​ price, price range over the past two​ years, dividend​ yield, and​ book-to-earnings ratios are just some of the information contained in a stock quotation. D. Original stock​ price, clearance stock​ price, price range over the past​ year, dividend​ yield, and​ price-earnings ratios are just some of the information contained in a stock quotation.

C. using a specific accounting method.

Managers may be able to boost the reported earnings of their firm​ by: A. persuading accountants to report what they ask. B. using old information. C. using a specific accounting method. D. using forecasted information.

1. B. decrease 2. A. increase

Stock prices tend to _____ when inflation is expected to _____ 1. A. increase B. decrease 2. A. increase B. decrease

C. ticker symbol.

The abbreviated term that is used to identify the stock for trading purposes is called​ the: A. code name. B. stock code. C. ticker symbol. D. nickname

D. the interaction of supply and demand for that stock.

The price of a stock is determined​ by: A. the interaction of supply and demand for the market in general. B. the interaction of investors and financial institutions for that stock. C. the interaction of supply and investors for that stock. D. the interaction of supply and demand for that stock.

C. reported earnings influence the stock value and the firm​ value, and this is a component of​ managers' evaluation and compensati

Top managers of a firm may be tempted to use misleading estimates of revenues and expenses​ because: A. the stock value influences reported​ earnings, and this is a component of​ managers' evaluation and compensation. B. the stock value influences reported earnings and the firm​ value, and this is a component of​ managers' evaluation and compensation. C. reported earnings influence the stock value and the firm​ value, and this is a component of​ managers' evaluation and compensation. D. reported earnings influence the stock​ value, and this is a component of​ managers' evaluation and compensation.

C. NYSE MKT LLC

What other exchange trades stocks in a similar manner to the​ NYSE? A. North American Stock Exchange B. California Stock Exchange C. NYSE MKT LLC D. National Stock Exchange

A. the name of the​ stock, whether the order is to buy or sell the​ stock, the number of shares of​ stock, and whether it is a market order or a limit order.

When placing an order to buy or sell​ stock, you must​ provide A. the name of the​ stock, whether the order is to buy or sell the​ stock, the number of shares of​ stock, and whether it is a market order or a limit order. B. the code of the​ stock, whether the order is a primary or secondary​ order, the number of shares of​ stock, and whether it is a full order or a brokerage order. C. the name of the​ stock, whether the order is to buy or sell the​ stock, the number of shares of​ stock, and whether it is a full order or a brokerage order. D. the code of the​ stock, whether the order is a primary or secondary​ order, the number of shares of​ stock, and whether it is a market order or a limit order.

D. All of the above.

Which of the following is a popular indicator of economic​ growth? A. personal income level B. new home sales C. the level of employment D. All of the above.

B. help make a market in one or more stocks by taking the position opposite of orders placed by clients. C. execute trades on the floor for bankers.

​Specialists: A. execute trades on the floor for themselves or someone else. B. help make a market in one or more stocks by taking the position opposite of orders placed by clients. C. execute trades on the floor for bankers. D. help make a market in one or more stocks by taking the position consistent with orders placed by clients.