Series 7: Chapter 17 Practice Questions

Chapter 17 Practice Questions

1. 1. Fast Track Stock does not trade securities for its own accounts. In its efforts to execute a buy order for your account, they would be acting as a:
2. A. Broker-dealer
3. B. Dealer
4. C. Broker
5. D. None of choices listed
6. 2. The fourth market primarily refers to transactions involving:
7. A. Day traders
8. B. Initial public offerings
9. C. Large institutional investors
10. D. Foreign stocks
11. 3. The physical location where buyers and sellers gather at trading posts to bid and ask for securities is referred to as the:
12. A. Primary market
13. B. Over-the-counter market
14. C. First market
15. D. Secondary market
16. 4. Which of the following types of orders guarantee a specific execution price?
17. A. Market orders
18. B. Limit orders
19. C. Stop orders
20. D. None of the choices listed
21. 5. Which of the following statements are true regarding stop orders?
22. I. Stop orders become market orders to either buy or sell once a target price is reached.
23. II. If the stop order is triggered, the order is guaranteed to execute, but there is no guarantee on the execution price.
24. III. Sell stop orders are typically used to limit loss on a short position.
25. IV. Buy stop orders are typically used to limit loss on a long position.
26. A. I and II
27. B. III and IV
28. C. I and IV
29. D. II and III
30. 6. James cannot believe XYZ is continuing to go down. He would like to give it a little more time to recover but would also like to protect himself if it continues to fall. What type of order would James most likely enter?
31. A. Buy stop
32. B. Sell Stop
33. C. Market
34. D. Sell limit
35. 7. A New York Stock Exchange member who makes a market in a specific stock and maintains an orderly market for the shares of that stock is considered a:
36. A. Transfer agent
37. B. De