金融市场与机构Madura第九版题库ch12.docVIP

Chapter 12 Market Microstructure and Strategies 1. A __________ order to buy or sell a stock means to execute the transaction at the best possible price. A) market B) limit C) stop-loss D) stop-buy ANSWER: A 2. With a _________ order, the investor specifies a purchase price that is above the current market price. A) market B) limit C) stop-loss D) stop-buy ANSWER: D 3. When investors buy stock with borrowed funds, this is sometimes referred to as A) use of proxy. B) purchasing stock on margin. C) a margin call. D) a margin residual claim. ANSWER: B 4. The maintenance margin is the minimum amount of the margin that investors must maintain as a percentage of the stock’s initial purchase price. A) True B) False ANSWER: B 5. Assume a stock is initially priced at $50, and pays an annual $2 dividend.? An investor uses cash to pay $25 a share and borrows the remaining funds at a 12 percent annual interest.? What is the return if the investor sells the stock for $55 at the end of one year? A) 50 percent B) 30 percent C) 10 percent D) 16 percent E) 8 percent ANSWER: D 6. When a brokerage firm demands more collateral from investors who have borrowed from the brokerage firm to buy stocks, it is making a A) margin call. B) short sale. C) proxy fight. D) hedge. ANSWER: A 7. Which of the following statements is incorrect? A) In a short sale, investors place an order to sell a stock that they do not own. B) Investors sell a stock short when they anticipate that its price will rise. C) When investors sell short, they will ultimately have to provide the stock back to the investor from whom they borrowed it. D) Short-sellers must make payments to the investor from whom the stock was borrowed to cover the dividend payments that the investor would have received of the stock had not been borrowed. ANSWER: B 8. Program trading is commonly used to reduce the susceptibility of a stock portfolio to stock market movements. may involve the purchase o