TEST BANK
CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS
FABOZZI/MODIGLIANI
Chapter 13
COMMON STOCK MARKET: I
MULTIPLE CHOICE
1. Common stock represents:
[E]
2. The secondary market for common stock has undergone significant changes since the
1960s as a result of:
[M]
3. Secondary market trading in common stocks occurs:
[E]
4. The “Big Board” is the name commonly used for:
78
5. Private transactions between institutional investors who deal directly with each other
without an intermediary take place in the:
[M]
6. The Third Market is the market for:
[M]
7. The largest membership category on the NYSE is that of:
[M]
8. Which of the following statements is most correct?
[M]
9. An important structural difference between exchanges and the OTC market with respect
to the activities of dealers is that:
10. On June 5, 1997, the NYSE voted to adopt a system of trading in:
[M]
11. Which of the following is false with respect to the regulatory changes in trading?
12. Firms seek to list their shares on the exchanges of several countries because:
[M]
13. When a U.S. corporation’s equities are traded in a foreign market, they are typically
issued in the form of:
[M]
14. The financial reform, which occurred in England in 1986, is called:
15. In Germany, the shares of smaller growth companies are traded:
[E]
16. The goals of the Big Bang reforms for the Japanese financial markets were to develop a:
[M]
17. A stock issue, which is offered simultaneously in several countries by an international
syndicate is called a(n):
[E]
18. Prior to February 2001, the Chinese stock market was divided into:
[E]
19. Most stock markets around the world use:
20. On the Tokyo Stock Exchange, a satori:
TRUE/FALSE
1. The trading mechanism on exchanges is the negotiated system.
[E]
2. OTC markets are called multiple market maker systems.
[E]
3. The cost of a seat on an exchange is determined by supply and demand.
[E]
4. A fragmented market is one in which some orders for a given stock are handled
differently from other orders.
[E]
5. ADRs are denominated in U.S. dollars and pay dividends in U.S. dollars.
ESSAY QUESTIONS
1. Compare and contrast the structure of the NYSE and the NASDAQ.
Key Issues:
2. Differentiate between the four types of markets where stocks are traded in the U.S.
Key Issues:
3. Discuss the basic characteristics of the exchanges in the U.K. and Germany.
Key Issues: