BUSI 420 Read & Interact Chapter 5 Assignment The Stock Market solutions complete answers

BUSI 420 Read & Interact Chapter 5 Assignment The Stock Market solutions complete answers

 

Assume you short a stock at $40 per share. You wish to limit your potential losses, so you wish to put in a buy order if the price rises to $45. What order type would be most appropriate?

 

An investor who wishes to specify the maximum price she is willing to pay for a stock would use a Blank______ order.

 

Financing for new, often high-risk, companies takes place in the        capital (VC) market.

 

True or false: Like hedge funds, most private equity funds follow a 2/20 fee structure.

 

Fund managers generally do not take any performance fess until the fund is ______.

 

Which of the following would not be an example of a security used by a venture capital firm to minimize risk while still retaining upside?

 

Taking a company private using borrowed money is called a        buyout.

 

The financing of nonpublic companies is referred to as         equity.

 

True or false: An initial public offering (IPO) is a type of primary market transaction.

 

A constraint that prevents private equity fund managers from collecting excessive compensation is a _______ provision.

 

An investment bank who underwrites an issue by purchasing all the shares and reselling them to the public is using:

 

The performance fee earned by a private equity firm is known as        interest.

 

Before shares can be sold to the public, the issue must be approved by the:

 

True or false: Each venture capital firm generally invests across all stages of firm development.

 

       market stock trading among investors is directed through three main channels. An investor may trade directly with other investors, indirectly through a broker, or directly with a dealer.

 

A leveraged buyout involves taking a company private using _____ money.

 

The difference between the ask price and the bid price is the        .

 

Selling new shares of an already public company is a seasoned equity offering, also known as a(n) __________.

 

Popularly known as the Big Board, the _____ was founded in 1792 and became a publicly owned corporation in 2006.

 

An investment bank who underwrites an issue by committing to sell as many shares as possible to the public (while returning any unsold shares) is using:

 

True or false: There are six different types of license holders in the NYSE.

 

The IPO        is a document that details information about a security offering.

 

True or false: Assume a stock is currently trading at $50 per share. A momentum trader who wants to buy the stock if it breaks resistance at $52 should submit a limit order to buy at $52.

 

Which of the following is not a secondary market transaction?

 

Which of the following statements is correct?

 

A ______ brings buyers and sellers together but does not maintain an inventory.

 

There are        stocks included in the Dow Jones Industrials Average.

 

True or false: Before 2006, the NYSE exchange members were the owners of the exchange.

 

Which of the following indexes is not value-weighted?

 

In a _____ market such as the NYSE, trading takes place both electronically and face-to-face.

 

A stock split has no effect on a        -weighted index since the total value of the company does not change.

 

When a stock hits the trigger price on a standard stop order, the order is converted to a        order.

 

True or false: NASDAQ market makers trade on an inventory basis and therefore post bid and ask prices.

 

True or false: The DJIA (or Dow) tracks the performance of industrial companies from all developed countries.

 

True or false: The Dow Jones Industrials Average (DJIA) is impacted most by the highest priced stocks.

 

Which type of index would require an adjustment for a stock split?

 

An investor who wishes to immediately execute a buy or sell at the current best price would use a _______ order.

 

An investor who wishes to specify a price at which a buy or sell order will be triggered would use a _______ order.

 

True or false: Assume you submit a stop order to buy a share of stock, and your designated stop price is $50. When the price hits $50 and the stop order is triggered, you will acquire the stock for $50 per share.

 

True or false: The bid price will always be larger than the ask price.

 

With a _____________, follow-on securities are offered only to existing owners.