1. Modern Art Online is preparing to sell new shares of stock to the general public. As part of this process, the firm just filed the required paperwork with the SEC that contains the material information related to this issue of stock. What is the name associated with this paperwork?
A) Comment letter
B) Registration statement
C) Prospectus
D) Red herring
E) Security agreement
2. New Labs just announced that it has received a patent for a product that will eliminate all flu viruses. This news is totally unexpected and viewed as a major medical advancement. Which one of the following reactions to this announcement indicates the market for New Labs stock is efficient?
A) The price of New Labs stock increases rapidly and then settles back to its pre-announcement level.
B) All stocks quickly increase in value and then all but New Labs stock fall back to their original values.
C) The price of New Labs stock increases rapidly to a higher price and then remains at that price.
D) The price of New Labs stock remains unchanged.
E) The value of all stocks suddenly increase and then level off at their higher values.
3. A person who executes customer orders to buy and sell securities on the floor of the NYSE is called a:
A) supplemental liquidity provider (SLP).
B) designated market maker (DMM).
C) Floor broker.
D) market maker.
E) runner.