Chapters 1 and 2 1. Give the characteristics of money and determine how the money supply is measured. (3) 2. Differentiate between the direct and indirect transfer of savings to users of funds. (2) Chapters 3 and 4 1. Explain the difference between an IPO and a private placement. (2) 2. Explain the role of investment bankers. (3) 3. A stock is currently selling for $60 a share. What is the percentage gain or loss on the following transactions? Identify if it is a gain or loss. a. You take a long position and the stock's price declines to $50. (1) b. You sell the stock short and the price increases to $70. (1) 4. You purchase 200 shares for $50 a share, and after a year the price rises to $70. What is your percentage return if you bought the stock on the following margin: a. 50% (ignore commissions, dividends, and interest expense) (1) b. 30% (ignore commissions, dividends, and interest expense) (1) c. 20% (and the borrowing cost was 10% of initial purchase). (1) 5. Explain the difference between a market order, a day order, and a good-till-canceled order (3)

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Your Questions Answered Chapters 1 and 2 1 Characteristics of Money and Money Supply Measurement Characteristics of Money Medium of Exchange Readily accepted for goods and services Unit of Account Use... View the full answer