Diff: 3 Type: MC
Topic: 1.2 Ownership Versus Control of Corporations
10) What strategies are available to shareholders to help ensure that managers are motivated to act in the interest of the shareholders rather than their own interest?
Answer:
1. The threat of a hostile takeover
2. Shareholder initiatives
3. Performance-based compensation
Diff: 3 Type: ES
Topic: 1.2 Ownership Versus Control of Corporations
1.3 The Stock Market
1) In 2015 what position was the Toronto Stock Exchange, TSX, ranked based on the value of trades in U.S. dollars?
A) The 13th position
B) The 8th position
C) The 20th position
D) None of the above
Answer: A
Diff: 1 Type: MC
Topic: 1.3 The Stock Market
2) Which of the following statements is correct?
A) The TSX is an electronic exchange and investors can post orders onto the TSX trading system from anywhere in the world.
B) The TSX is an electronic exchange and investors can post orders onto the TSX trading system from anywhere in North America.
C) The TSX is an electronic exchange and investors can post orders onto the TSX trading system from anywhere in Canada.
D) The TSX is an electronic exchange and investors can post orders onto the TSX trading system from anywhere in Toronto.
Answer: A
Diff: 1 Type: MC
Topic: 1.3 The Stock Market
3) Stocks trading in a large electronic exchange such as the TSX will normally:
A) experience a narrow bid-ask range
B) experience a wide bid-ask range
C) be thinly traded
D) incur high transaction costs
Answer: A
Diff: 2 Type: MC
Topic: 1.3 The Stock Market
4) In 2015, what position was the Toronto Stock Exchange, TSX, ranked based on domestic market capitalization in U.S. dollars?
A) The 10th position
B) The 14th position
C) The 20th position
D) None of the above
Answer: A
Diff: 1 Type: MC
Topic: 1.3 The Stock Market
5) The two common measures used to rank stock markets worldwide are:
A) the total number of all domestic corporations listed on the exchange and the total value of the volume of shares traded on the exchange at the end of each year
B) the total value of all domestic corporations listed on the exchange and the total number of shares traded on the exchange at the end of each year
C) the total value of all domestic corporations listed on the exchange and the total value of the volume of shares traded on the exchange at the end of each year
D) the total value of all foreign corporations listed on the exchange and the total value of the volume of shares traded on the exchange at the end of each year
Answer: C
Diff: 3 Type: MC
Topic: 1.3 The Stock Market
6) In 2015, the largest stock market by domestic capitalization in the world was:
A) the London Stock Exchange
B) the NASDAQ
C) the American Stock Exchange
D) the New York Stock Exchange
Answer: D
Diff: 1 Type: MC
Topic: 1.3 The Stock Market
7) An investment is said to be liquid if the investment:
A) has large day-to-day fluctuations in price
B) has a large bid-ask spread
C) can easily be converted into cash
D) is traded on a stock exchange
Answer: C
Diff: 2 Type: MC
Topic: 1.3 The Stock Market
8) In 2015, the largest stock market by value of shares traded in the world was:
A) the London Stock Exchange
B) the Shanghai Stock Exchange
C) the American Stock Exchange
D) the NASDAQ
Answer: B
Diff: 2 Type: MC
Topic: 1.3 The Stock Market
9) What type of company trades on an organized stock exchange?
A) A limited liability company
B) A private company
C) A crown corporation
D) A public company
Answer: D
Diff: 1 Type: MC
Topic: 1.3 The Stock Market
10) Which of the following statements is false?
A) On the NASDAQ, stocks can and do have multiple market makers who compete with each other. Each market maker must post bid and ask prices in the NASDAQ network where they can be viewed by all participants.
B) Bid prices exceed ask prices.
C) Because customers always buy at the ask price and sell at the bid price, the bid-ask spread is a transaction cost investors have to pay in order to trade.