1.Randy Smith called his broker, Pam Durbin, and asked her to borrow 100 shares of Zylex Corp. stock. Randy then sold the stock at the current market price of $45 while anticipating that Durbin would be able to buy the stock back for him at a lower price in the future. What type of order did Smith place?

A)   Short sale.

B)   Market order.

C)   Special order.

D)   Margin order.

2.An order placed to protect a short position is called a:

A)   stop loss buy.

B)   stop loss sell.

C)   limit order.

D)   protective call.

3.An investor wishes to short sell 500 shares of McDonald Corporation. The shares open lower at $14.50 and the next five transactions are $14.00, $14.00, $13.50, $14.25, and $14.50. The lowest price at which the order can be executed is:

A)   $14.25.

B)   $13.50.

C)   $14.00.

D)   $14.50.

4.Which of the following statements about trading shares of stock or market efficiency is FALSE?

A)   Maintenance margin is the required percentage of an investor's equity compared to the total value of the stock after the investor trades on margin.

B)   Block houses, where institutional traders buy and sell large blocks of shares, are also called upstairs traders.

C)   The uptick rule requires that the last trade in the security be at a price higher than the previous trade.

D)   External efficiency means prices adjust rapidly to new information.

5.Which of the following statements regarding regulations governing the short-sale process is FALSE?

A)   Short sales can only be made when the last change in the market price of the stock has been upward.

B)   The short seller must pay a margin equivalent to the prevailing margin requirement when the transaction is made.

C)   If dividends are paid on the stock during the short-sale transaction, the short seller must pay dividends to the investor that loaned the stock.

D)   The short-sale process must be completed within a 90-day period.

答案和详解如下：

1.Randy Smith called his broker, Pam Durbin, and asked her to borrow 100 shares of Zylex Corp. stock. Randy then sold the stock at the current market price of $45 while anticipating that Durbin would be able to buy the stock back for him at a lower price in the future. What type of order did Smith place?

A)   Short sale.

B)   Market order.

C)   Special order.

D)   Margin order.

The correct answer was A)

The objective of a short sale is to sell borrowed securities at the current market price and then replace them with the same securities purchased at a lower price.

2.An order placed to protect a short position is called a:

A)   stop loss buy.

B)   stop loss sell.

C)   limit order.

D)   protective call.

The correct answer was A)

A short position profits from declines in stock price and experiences losses as the price rises. A stop loss buy is a limit order that is placed above the market price. When the stock price reaches the stop price, the limit order is executed curtailing further loses.

3.An investor wishes to short sell 500 shares of McDonald Corporation. The shares open lower at $14.50 and the next five transactions are $14.00, $14.00, $13.50, $14.25, and $14.50. The lowest price at which the order can be executed is:

A)   $14.25.

B)   $13.50.

C)   $14.00.

D)   $14.50.

The correct answer was A)

Short sells are executed on an uptick.

4.Which of the following statements about trading shares of stock or market efficiency is FALSE?

A)   Maintenance margin is the required percentage of an investor's equity compared to the total value of the stock after the investor trades on margin.

B)   Block houses, where institutional traders buy and sell large blocks of shares, are also called upstairs traders.

C)   The uptick rule requires that the last trade in the security be at a price higher than the previous trade.

D)   External efficiency means prices adjust rapidly to new information.

The correct answer was C)

The uptick rule requires that either: (1) the last trade is at a price higher than the previous trade, or (2) the last trade is at the same price (a zero trade) and that the previous non-zero trade is at a price higher than the trade before it.

5.Which of the following statements regarding regulations governing the short-sale process is FALSE?

A)   Short sales can only be made when the last change in the market price of the stock has been upward.

B)   The short seller must pay a margin equivalent to the prevailing margin requirement when the transaction is made.

C)   If dividends are paid on the stock during the short-sale transaction, the short seller must pay dividends to the investor that loaned the stock.

D)   The short-sale process must be completed within a 90-day period.

The correct answer was D)

There are no regulations regarding a time limit associated with short sales.