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FIN 501 TEST BANK CH(1,2,3) 2026
LATEST QUESTIONS AND ANSWERS|
ACE YOUR GRADES.
On October 12, Kevin placed a day order to purchase 100 shares
of ABC stock at $21 a share. During the day, the stock sold at
prices ranging from $21.01 to $22.49. Over the following month
the stock sold in a range of $21.60 to $23.05. On December 2,
the market declined radically and the price of ABC stock dropped
to $19.94. Which one of the following statements is correct
concerning Allen's order?
A) The order was never executed.
B) The order was executed at $21.01 per share.
C) The order was executed at $22.49.
D) The order was executed at $19.94. - correct answer -A
Ryan bought a stock three years ago for $6 a share. Today, June
22, the stock is selling for $72 a share. Ryan is afraid that the
price will fall and does not want to lose his profits so he places a
stop-loss order to sell at $70. The stock sells between $71 and
$75 throughout the remainder of the day on June 22. On the
morning of June 23, the stock opens at $9 a share based on
rumors of a possible bankruptcy due to inappropriate accounting
procedures. Which one of the following statements is true
concerning this situation?
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A) Ryan was able to sell his stock for $70 a share thereby
protecting his profits.
B) Ryan's stock was sold for $9 a share causing him to lose most
of his profits.
C) Ryan still owns his shares of stock since his order was never
executed at the $70 price.
D) Ryan received a call from the specialist asking him what he
wanted to do about his order. - correct answer -B
Three years ago, Emily bought 200 shares of HQ at $27.00 per
share. HQ shares have risen to $57.50 per share. If the stock
continues to rise, she wants to hold it, but she fears that the price
could fall quickly and she will lose most of her profit. Which of the
following decisions would be best?
A) Place a limit order to sell at $60.00.
B) Place a stop-limit order at $55.00.
C) Place a stop-loss order at $27.00.
D) Place a stop-loss order at $55.00. - correct answer -D
Mike bought 200 shares of EG stock two years ago at $16 per
share. The stock has traded in a range of $21 to $44 a share over
the past year. EG is now selling for $43.60 a share. EG
announces its earnings today and Mike feels the stock could go to
$60 on good news or fall to $30 on bad. To protect his profits, the
most appropriate order for him to place is
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A) market order to sell immediately.
B) a limit sell order at $60.00.
C) a stop loss order at $42.
D) a stop-limit order to sell at $45. - correct answer -C
Angela placed a stop-limit order to sell 100 shares of RST stock
at $28 when the market price of RST was $31. Shortly after
Angela placed her order, trading on RST was halted due to a
pending news announcement. When trading re-opens RST is
priced at $24 a share. Within minutes the price of RST began to
drop further until it reached $19 a share. Which one of the
following statements is correct concerning Angela's stop-limit
order to sell?
A) Angela's stock was sold for $28 a share.
B) Angela's stock was sold for $24 a share.
C) Angela's stock was sold at a price between $19 and $24 a
share.
D) Angela still owns her 100 shares of stock. - correct answer -D
At 10:45 a.m., Ashley placed a stop-loss order to sell 200 shares
of Alpha stock at $43 a share. At 2:15 p.m., the price of Alpha fell
to $42.90 and then rose to $43.40 a share by the end of the
trading day. Ashley order was executed that day. Ashley would
have received a price
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A) of $42.90 a share for her stock since her order was already
recorded in the specialist's book.
B) of $43.40 a share for her stock since that was the closing price
on the day of execution.
C) between $42.90 and $43.40 a share depending upon when her
trade executed.
D) equal to the average prices paid by the specialist during that
trading day. - correct answer -C
Which of the following statements concerning day traders are
correct?
I. Day traders generally do not hold securities over night.
II. Day trading is a relatively low risk approach to investing.
III. Some day traders sell stocks short.
IV. Day trading was declared illegal by the Market Stabilization
Act of 2002. - correct answer -I and III only
An informal, voluntary agreement to solve disputes between an
investor and his/her broker by utilizing a person to facilitate
negotiations between the two parties is called
A) voluntary arbitration.
B) binding arbitration.
C) mediation.
FIN 501 TEST BANK CH(1,2,3) 2026
LATEST QUESTIONS AND ANSWERS|
ACE YOUR GRADES.
On October 12, Kevin placed a day order to purchase 100 shares
of ABC stock at $21 a share. During the day, the stock sold at
prices ranging from $21.01 to $22.49. Over the following month
the stock sold in a range of $21.60 to $23.05. On December 2,
the market declined radically and the price of ABC stock dropped
to $19.94. Which one of the following statements is correct
concerning Allen's order?
A) The order was never executed.
B) The order was executed at $21.01 per share.
C) The order was executed at $22.49.
D) The order was executed at $19.94. - correct answer -A
Ryan bought a stock three years ago for $6 a share. Today, June
22, the stock is selling for $72 a share. Ryan is afraid that the
price will fall and does not want to lose his profits so he places a
stop-loss order to sell at $70. The stock sells between $71 and
$75 throughout the remainder of the day on June 22. On the
morning of June 23, the stock opens at $9 a share based on
rumors of a possible bankruptcy due to inappropriate accounting
procedures. Which one of the following statements is true
concerning this situation?
, Page | 2
A) Ryan was able to sell his stock for $70 a share thereby
protecting his profits.
B) Ryan's stock was sold for $9 a share causing him to lose most
of his profits.
C) Ryan still owns his shares of stock since his order was never
executed at the $70 price.
D) Ryan received a call from the specialist asking him what he
wanted to do about his order. - correct answer -B
Three years ago, Emily bought 200 shares of HQ at $27.00 per
share. HQ shares have risen to $57.50 per share. If the stock
continues to rise, she wants to hold it, but she fears that the price
could fall quickly and she will lose most of her profit. Which of the
following decisions would be best?
A) Place a limit order to sell at $60.00.
B) Place a stop-limit order at $55.00.
C) Place a stop-loss order at $27.00.
D) Place a stop-loss order at $55.00. - correct answer -D
Mike bought 200 shares of EG stock two years ago at $16 per
share. The stock has traded in a range of $21 to $44 a share over
the past year. EG is now selling for $43.60 a share. EG
announces its earnings today and Mike feels the stock could go to
$60 on good news or fall to $30 on bad. To protect his profits, the
most appropriate order for him to place is
, Page | 3
A) market order to sell immediately.
B) a limit sell order at $60.00.
C) a stop loss order at $42.
D) a stop-limit order to sell at $45. - correct answer -C
Angela placed a stop-limit order to sell 100 shares of RST stock
at $28 when the market price of RST was $31. Shortly after
Angela placed her order, trading on RST was halted due to a
pending news announcement. When trading re-opens RST is
priced at $24 a share. Within minutes the price of RST began to
drop further until it reached $19 a share. Which one of the
following statements is correct concerning Angela's stop-limit
order to sell?
A) Angela's stock was sold for $28 a share.
B) Angela's stock was sold for $24 a share.
C) Angela's stock was sold at a price between $19 and $24 a
share.
D) Angela still owns her 100 shares of stock. - correct answer -D
At 10:45 a.m., Ashley placed a stop-loss order to sell 200 shares
of Alpha stock at $43 a share. At 2:15 p.m., the price of Alpha fell
to $42.90 and then rose to $43.40 a share by the end of the
trading day. Ashley order was executed that day. Ashley would
have received a price
, Page | 4
A) of $42.90 a share for her stock since her order was already
recorded in the specialist's book.
B) of $43.40 a share for her stock since that was the closing price
on the day of execution.
C) between $42.90 and $43.40 a share depending upon when her
trade executed.
D) equal to the average prices paid by the specialist during that
trading day. - correct answer -C
Which of the following statements concerning day traders are
correct?
I. Day traders generally do not hold securities over night.
II. Day trading is a relatively low risk approach to investing.
III. Some day traders sell stocks short.
IV. Day trading was declared illegal by the Market Stabilization
Act of 2002. - correct answer -I and III only
An informal, voluntary agreement to solve disputes between an
investor and his/her broker by utilizing a person to facilitate
negotiations between the two parties is called
A) voluntary arbitration.
B) binding arbitration.
C) mediation.
