Please explain all answers.

1. Odd Lot

. Round Lot

. I.P.O.

. Prospectus

. Market...

Question

Please explain all answers.

1. Odd Lot

. Round Lot

. I.P.O.

. Prospectus

. Market Maker

. Specialist

. Dealer

. Secondary Market

. Investment Banker

. T + 3

Essay Questions

1. Briefly explain what are financial intermediariesand their role in our economy. Briefly explain the difference between pure risk and speculative risk.

. Briefly explain the difference between a market order and limit order? In your answer please give an example of each. Briefly explain the difference between a day order and Good Till Canceled (GTC) order?

Briefly explain the four factors of production (use an example in your answer). Explain the difference the primary stock market and the secondary market.

Short Answers

. Which is worth more a dollar today or a dollar in the future? _____________.

2. In every investment there is a tradeoff between __________ and __________.

. Financial intermediaries bring ____________ and ___________ together.

. The cost of issuing stock for the first time is? ___________ __________.

. The ______ guarantees your deposits in commercial banks up to $_________.

6. Do you expect Social Security to be around when you retire? _________ (yes or no)
	(Your opinion for this question is fine and will receive full points.)

. ___________ is the process of computing the future value of a dollar.

. ____________ is the process of computing the present value of a dollar.

. A stream of income or payments is called an __________.

. _________ __________ is the Chairman of the Federal Reserve.

Time Value of Money Problems /Please show your work.

You want to buy a car for $25,000 and have $3,000 to put down. Your payment is $516.67 for 48 months. What is your interest rate? ______

You want to buy a house. You can only afford $1,800 per month and you anticipate that taxes will be $100 per month and insurance $58.70 per month. If you finance for 15 years at 6% interest how much house can you afford?

You are purchasing an RV for $80,000 with a 10% down payment, financed for 10 years at 8% interest. How much is your payment __________? What is the interest, principle and the balance of the 1st and 24th payment?

1st			24th 
Principle __________		__________
Interest __________		__________
Balance __________		__________

David · Accepted Answer

1. Odd Lot – It is quantity that differs from the standard trading unit, mainly amount of stock fewer than 100 shares.
2. Round Lot – the normal unit of trading of a security with 100 shares of stock. 
3. I.P.O. – It is the first sale of stock by a company to the public. 
4. Prospectus – A legal or formal document which is filed with Securities and Exchange Commission which provides details about investment.  
5. Market Maker – A dealer of securities who undertakes buying or selling at specified price at all the times. 
6. Specialist – A member of stock exchange who makes exchange trade securities. 
7. Dealer – A person or the firm in the business of buying and selling the securities. 
8. Secondary Market – A market where the investor purchase the assets or the securities from investors other than issuing companies. 
9. Investment Banker – A banker who deals in underwriting the new securities. 
10. T + 3 – The obligation in the brokerage to settle the securities traded by the third day following the trade date. 
Essay Questions 
1. Briefly explain what are financial intermediaries and their role in our economy. Briefly explain the difference between pure risk and speculative risk. 
Answer:
Financial intermediaries are the entities having low cost money which act as providers of money to those require funding. They exercise great control and power over the economy of the country. It allows the financial transactions of the country and movement in the funds. 
The difference between pure risk and speculative risk are:-
1) In pure risk, there is possibility of loss or no loss whereas speculative risk there is possibility of gain as well as loss.
2) Pure risks are insurable whereas speculative risk is not insurable. 
Briefly explain the difference between a market order and limit order? In your answer please give an example of each. 
Answer:
Market order is a buy or sells order in which the broker execute the order at the best price that is available currently. 
Limit order is an order to the broker to buy specific quantity at equal, below or above a specified price which is also called limit price. 
3. Briefly explain the difference between a day order and Good Till Canceled (GTC) order? 
Answer:
A day order is an order which automatically expires after the end of trading day or when the market closes if the order is unfilled during the trading hours of the day.

Please explain all answers. 1. Odd Lot . Round Lot . I.P.O. . Prospectus . Market Maker . Specialist . Dealer . Secondary Market . Investment Banker . T + 3 Essay Questions 1. Briefly explain what are...

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