call options (calls with strike price equal to the stock price) on IBM stock now and selling them six months from now. The following questions are from past CFA examinations: 22. If you place a stop-loss order to sell 100 shares of stock at $55 when the current price is $62, how much will you receive for each share if the price drops to $50? a. $50. b. $55. c. $54.90. d. Cannot tell from the information given. 23. You wish to sell short 100 shares of XYZ Corporation stock. If the last two transactions were at 34.10 followed by 34.15, you only can sell short on the next transaction at a price of a. 34.10 or higher. b. 34.15 or higher. c. 34.15 or lower. d. 34.10 or lower. 24. Specialists on the New York Stock Exchange do all of the following except a. Act as dealers for their own accounts. b. Execute limit orders. c. Help provide liquidity to the marketplace. d. Act as odd-lot dealers.       SOLUTIONS TO CONCEPT C H E C K S 1. Limited-time shelf registration was introduced because of its favorable trade-off of saving issue costs against mandated disclosure. Allowing unlimited-time shelf regis- tration would circumvent blue sky laws that ensure proper disclosure. 2. Run for the hills! If the issue were underpriced, it most likely would be oversub- scribed by institutional traders. The fact that the underwriters need to actively mar- ket the shares to the general public may indicate that better-informed investors view the issue as overpriced. 100P $4,000 100P .4 100P $4,000 40P 60P $4,000 P $66.67 per share 4. The investor will purchase 150 shares, with a rate of return as follows: I. Introduction 3. How Securities Are Traded The McGraw−Hill Companies, 2001           102 PART I Introduction       SOLUTIONS