Question

Please choose a letter answer and explain the answer please.

1. You own shares of the Illuminati Company. The current price is $80 a share. You want to limit your potential losses if the stock falls so you tell your broker to sell out your shares if the price drops to $70 a share. The type of order you would place is

1. a stop buy
2. a stop sell
3. a limit buy
4. a limit sell

2.               assets generate net income to the economy and                      allocation of income among investors assets define allocation of income among investors.

1. Financial, financial
2. Financial, real
3. Real, financial
4. Real, real

3. In the event of a firm’s bankruptcy,                    .
   1. the firm’s stockholders are personally liable for the firm’s obligations.
   2. the most the shareholders can lose is their original investment in the firm’s stock.
   3. common shareholders are first in line to receive their claims on the firm’s assets.
   4. bondholders have claim to what is left from liquidation of the firm’s assets.

4. The price the owner of a call option must pay in order to purchase the stock is called the .
   1. purchase price
   2. exercise price
   3. break-even price
   4. none of the above

Answer 1

1. You own shares of the Illuminati Company. The current price is $80 a share. You want to limit your potential losses if the stock falls so you tell your broker to sell out your shares if the price drops to $70 a share. The type of order you would place is:B.  Stop sell. A sell stop order is usally placed in order to stop the losses, should a security's price fall & sell before the losses are too high.

2. Financial assets generate net income to the economy and Real allocation of income among investors assets define allocation of income among investors.: B

3. In the event of a firm’s bankruptcy, B. The most the shareholders can lose is their original investment in the firm’s stock.

4. The price the owner of a call option must pay in order to purchase the stock is called the . Strike price..Thus D non of above