Which one of the following statements is generally correct?
Private placements must be registered with the SEC.
All secondary markets are auction markets.
Dealer markets have a physical trading floor.
Auction markets match buy and sell orders.
Dealers arrange trades but never own the securities traded.
References
Multiple Choice Learning Objective:
01-03 Articulate the
financial implications
of the different forms
of business
organization.
Difficulty: 2
Intermediate
Section: 1.5 The
Agency Problem and
Control of the
Corporation
61.
Award: 10.00 points
Which one of the following statements concerning stock exchanges is correct?
Nasdaq is a broker market.
The NYSE is a dealer market.
The exchange with the strictest listing requirements is Nasdaq.
Some large companies are listed on Nasdaq.
Most debt securities are traded on the NYSE.
References
Multiple Choice Learning Objective:
01-03 Articulate the
financial implications
of the different forms
of business
organization.
Difficulty: 1 Basic Section: 1.5 The
Agency Problem and
Control of the
Corporation
62.
Award: 10.00 points
Symone sold shares of Naraghi Corporation stock to Aleena. The stock is listed on the NYSE. This
trade occurred in which one of the following?
Primary, dealer market
Secondary, dealer market
Primary, auction market
Secondary, auction market
Secondary, OTC market
References
Multiple Choice Learning Objective:
01-03 Articulate the
financial implications
of the different forms
of business
organization.
Difficulty: 2
Intermediate
Section: 1.5 The
Agency Problem and
Control of the
Corporation
63.
Award: 10.00 points
Which one of the following statements is correct concerning the NYSE?
The publicly traded shares of an NYSE-listed firm must be worth at least $250 million.
The NYSE is the largest dealer market for listed securities in the United States.
The listing requirements for the NYSE are more stringent than those of Nasdaq.
Any corporation desiring to be listed on the NYSE can do so for a fee.
The NYSE is an OTC market functioning as both a primary and a secondary market.
References
Multiple Choice Learning Objective:
01-03 Articulate the
financial implications
of the different forms
of business
organization.
Difficulty: 2
Intermediate
Section: 1.5 The
Agency Problem and
Control of the
Corporation
64.
Award: 10.00 points
Which of the following actions would be most likely to decrease agency costs for the firm?
Increase employees’ salaries to exceed the salaries paid by competitors
Pay all employees based on the amount of revenue generated by the firm
Prohibit employees from becoming shareholders of the firm
Pay bonuses to employees only if profits increase from one year to the next
Reward high performing employees with shares of stock
References
Multiple Choice Learning Objective:
01-04 Explain the
conflicts of interest
that can arise
between managers
and owners.
Difficulty: 2
Intermediate
Section: 1.4 The Goal
of Financial
Management
65.
Award: 10.00 points
Which of the following actions would be considered an agency problem?
An owner of a sole proprietorship takes company office supplies for personal use
Both partners in a general partnership close the office early one day to go skiing
A manager in a corporation buys shares of the company’s stock when the price falls
A manager in a corporation makes online personal travel arrangements during work hours
A shareholder in a corporation sells shares of the company’s stock when the price rises
References
Multiple Choice Learning Objective:
01-04 Explain the
conflicts of interest
that can arise
between managers
and owners.
Difficulty: 2
Intermediate
Section: 1.4 The Goal
of Financial
Management