#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 the role of a brokerage firm in securities trading?
To execute trades on behalf of clients
ExplanationBrokerage firms execute trades for clients.
#8
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.
#9
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.
#10
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.
#11
What is a 'market maker'?
A brokerage firm that matches buy and sell orders in the market
ExplanationMarket makers match buy and sell orders.
#12
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.
#13
Which regulatory body oversees securities trading in the United States?
Securities and Exchange Commission (SEC)
ExplanationSEC oversees securities trading in the US.
#14
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.
#15
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.
#16
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.
#17
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.