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1、Chapter 11The Stock MarketMultiple Choice Questions1. (I) A share of common stock in a firm represents an ownership interest in that firm. (II) A share ofpreferred stock is as much like a bond as it is like common stock.(a) (I) is true, (II) false.(b) (I) is false, (II) true.(c) Both are true.(d) Bo
2、th are false.Answer: C2. Preferred stockholders hold a claim on assets that has priority over the claims of(a) both common stockholders and bondholders.(b) neither common stockholders nor bondholders.(c) common stockholders, but after that of bondholders.(d) bondholders, but after that of common sto
3、ckholders.Answer: C3. (I) Preferred stockholders hold a claim on assets that has priority over the claims of commonstockholders, but after that of bondholders. (II) Firms issue preferred stock in far greater amounts than common stock.(a) (I) is true, (II) false.(b) (I) is false, (II) true.(c) Both a
4、re true.(d) Both are false.Answer: A4. (I) Preferred stockholders hold a claim on assets that has priority over the claims of commonstockholders. (II) Bondholders hold a claim on assets that has priority over the claims of preferred stockholders.(a) (I) is true, (II) false.(b) (I) is false, (II) tru
5、e.(c) Both are true.(d) Both are false.Answer: C#Mishkin/Eakins ? Financial Markets and Institutions, Fifth Edition5. (I) Firms issue common stock in far greater amounts than preferred stock. (II) The total volume ofstock issued is much less than the volume of bonds issued.(a) (I) is true, (II) fals
6、e.(b) (I) is false, (II) true.(c) Both are true.(d) Both are false.Answer: C6. The riskiest capital market security is(a) preferred stock.(b) common stock.(c) corporate bonds.(d) Treasury bonds.Answer: B7. Organized exchanges account for about percent of the total dollar volume of domesticstock shar
7、es traded.(a) 30(b) 45(c) 60(d) 70Answer: D8. Organized exchanges account for about percent of the total dollar volume of domesticstocks traded.(a) 60(b) 70(c) 80(d) 90Answer: B9. (I) The largest of the organized stock exchanges in the United States is the New York StockExchange. (II) To be listed o
8、n the NYSE, a firm must have a minimum of $100 million dollars in market value or $10 million in revenues.(a) (I) is true, (II) false.(b) (I) is false, (II) true.(c) Both are true.(d) Both are false.Answer: A10. To list on the NYSE, a firm must(a) have earnings of at least $100 million for each of t
9、he last three years.(b) have at least $500 million of market value and $100 million of revenue.(c) have a total of $100 million in market value of publicly traded shares.(d) meet all of the above requirements.(e) meet (a) and (b) of the above requirements.Chapter 11 The Stock Market#Answer:Chapter 1
10、1 The Stock Market#11. Securities not listed on one of the exchanges trade in the over-the-counter market. In this exchange, dealers “ make a market ” by(a) buying stocks for inventory when investors want to sell.(b) selling stocks from inventory when investors want to buy.(c) doing both of the abov
11、e.(d) doing neither of the above.Answer: C12. The most active stock exchange in the world is the(a) Nikkei Stock Exchange.(b) London Stock Exchange.(c) Shanghai Stock Exchange.(d) New York Stock Exchange.Answer: A13. Which of the following statements about trading operations in an organized exchange
12、 are correct?(a) Floor traders all deal in a wide variety of stocks.(b) In most trades, specialists match buy and sell orders.(c) In most trades, specialists buy for or sell from their own inventories.(d) The SuperDOT system is used to expedite large trades of over 100,000 shares.Answer: B14. Which
13、of the following is not an advantage of Electronic Communications Networks (ECNs)?(a) All unfilled orders are available for review by ECN traders.(b) Transactions costs are lower for ECN trades.(c) Trades are made and confirmed faster.(d) ECNs work well for thinly traded stocks.Answer: D15. Which of
14、 the following statements is false regarding Electronic Communications Networks (ECNs)?(a) Archipelago and Instinet are two examples of ECNs.(b) Competition from ECNs has forced NASDAQ to cut its fees.(c) Traders benefit from lower trading costs and faster service.(d) ECNs allow institutional invest
15、ors, but not individuals, to trade after hours.Answer: D16. A basic principle of finance is that the value of any investment is(a) the present value of all future net cash flows generated by the investment.(b) the undiscounted sum of all future net cash flows generated by the investment.(c) unrelated to the future net cash flows generated by the investment.(d) unrelated to the degree of risk associated with the future net cash flows generated by the investment.17. A stock currently sells for $25 per share and pays $0.24 per year in dividends. What is an investo
