Question

Which of the following correctly defines a type of market organization?

All of these answers.

An auction market allows buyers and sellers to negotiate the securities' prices between themselves.

A broker market centers on market-makers who provide the service of continuously bidding for securities.

A dealer market is used for securities that have no public market.

A market's prices reflect all publicly available information and the prices instantly change to reflect new public information. This market reflects ___.

the strong-form efficient-market hypothesis.

the weak-form efficient-market hypothesis.

the semi-strong-form efficient-market hypothesis.

the semi-weak-form efficient-market hypothesis.

Which of the following restrictions were imposed on investment firms as part of the Global Research Settlement?

Banking and analysis departments must be insulated from each other.

Research analysts are prohibited on going on pitches and roadshows that promote an IPO.

The IPO quiet period was increased to 40 days.

All of these answers.

Which of the following is a characteristic of an unrealized return?

Unrealized gains result from the actual sale of the asset.

An unrealized return has no tax implications.

All of these answers.

Unrealized gains involve a set transaction and are straight-forward to calculate.

Answer 1

Question 1:

Option A. All of these answers

Explanation:

All of the following defines the market organsiation:

• An auction market allows buyers and sellers to negotiate the securities' prices between themselves
• A broker market centers on market-makers who provide the service of continuously bidding for securities
• A dealer market is used for securities that have no public market

Question 2:

Option A. strong-form efficient-market hypothesis

Explanation:

It means both the information available to the public and any information not publicly known is completely accounted for in current stock prices, and there is no type of information that can give an investor an advantage on the market.

Question 3:

Option D. All of these answers.

Explanation:

The following restrictions were imposed on investment firms:

• Banking and analysis departments must be insulated from each other
• Research analysts are prohibited on going on pitches and roadshows that promote an IPO
• The IPO quiet period was increased to 40 days

Question 4:

Option B. An unrealized return has no tax implications

Explanation:

An actual sale of an asset results into a realised gain

unrealised gains are not calculated straight forwardly.They are calculated based on a period end but not on a set transaction.