#1
What does the term 'bid' refer to in securities trading?
The price at which a security is demanded for purchase
ExplanationBid is the price for buying securities.
#2
Which of the following is NOT a type of brokerage order?
Static order
ExplanationStatic order is not a type of brokerage order.
#3
What is the 'spread' in securities trading?
The difference between the price at which a security can be bought and the price at which it can be sold
ExplanationSpread is the difference between buy and sell prices.
#4
What is a 'blue chip' stock?
A stock of a well-established and financially stable company with a history of reliable performance
ExplanationBlue chip stocks are from stable companies.
#5
What is a 'stock exchange'?
A physical location where stocks are bought and sold
ExplanationStock exchange is where stocks are traded.
#6
What is the 'dividend yield' of a stock?
The annual dividend income per share divided by the current market price per share
ExplanationDividend yield is annual income divided by price.
#7
What is a 'stop order' in securities trading?
An order to buy or sell a security at a specified price or better, once the price reaches a certain level
ExplanationStop order triggers at specified price.
#8
What is 'liquidity' in the context of securities trading?
The ease with which a security can be converted into cash without affecting its market price
ExplanationLiquidity is ease of converting to cash.
#9
What is a 'stock split'?
The process of dividing a single share of a company's stock into multiple shares
ExplanationStock split divides shares into multiples.
#10
What is 'market capitalization'?
The total dollar value of all outstanding shares of a company's stock
ExplanationMarket capitalization is total stock value.
#11
What is the role of a brokerage firm in securities trading?
To execute trades on behalf of clients
ExplanationBrokerage firms execute trades for clients.
#12
What does 'short selling' refer to in securities trading?
Selling securities borrowed from a broker with the intention of buying them back later
ExplanationShort selling involves selling borrowed securities.
#13
What is the 'margin call' in securities trading?
A request for additional funds from a broker to cover losses in a trading account
ExplanationMargin call requests additional funds for losses.
#14
What is the 'ticker symbol' of a security?
A unique code assigned to a security for trading purposes
ExplanationTicker symbol is a unique trading code.
#15
What is a 'market maker'?
A brokerage firm that matches buy and sell orders in the market
ExplanationMarket makers match buy and sell orders.
#16
What does the 'P/E ratio' indicate about a stock?
The price of the stock relative to its earnings per share
ExplanationP/E ratio is price relative to earnings.
#17
What does the 'closing price' of a security refer to?
The price at which the security is traded when the market closes for the day
ExplanationClosing price is the day's final traded price.
#18
What is 'volatility' in securities trading?
The tendency of a security's price to fluctuate over time
ExplanationVolatility is price fluctuation tendency.
#19
What is a 'block trade'?
A large trade of securities that occurs outside of the open market
ExplanationBlock trade is large off-market trade.
#20
What is the 'order book' in securities trading?
A record of all buy and sell orders for a particular security
ExplanationOrder book records all buy and sell orders.
#21
Which regulatory body oversees securities trading in the United States?
Securities and Exchange Commission (SEC)
ExplanationSEC oversees securities trading in the US.
#22
What is 'arbitrage' in securities trading?
The process of buying and selling securities to profit from price differences in different markets
ExplanationArbitrage exploits price differences in markets.
#23
What is 'insider trading'?
The practice of buying and selling securities based on confidential information not available to the public
ExplanationInsider trading uses confidential information.
#24
What is 'securities lending'?
The practice of temporarily transferring securities from one investor to another in exchange for a fee
ExplanationSecurities lending is temporary transfer for a fee.
#25
What is 'capital gains tax'?
A tax on the profit from the sale of a capital asset
ExplanationCapital gains tax is tax on asset sale profit.