session 14 quiz
What is true of the Dow Jones Industrial Average?
It is price weighted
The S&P 500 is a market value weighted index
True
A trader who makes a market in one or more securities and is charged with maintaining a fair and orderly market is know as
Designated market maker
A designated market maker (DMM) is in charge of
- Maintaining limit orders - Making the market in one of more securities - Maintaining an orderly market
Dealers make money by maximizing the bid-ask spread while brokers make money on commissions per brokered deal.
true
Most of the trading on the market is now done electronically.
true
Shares of Apple are currently trading at approximately $129. Placing an order to buying 1000 shared BUT only when the stock price hits $125 is know as a
Limit Order
Which of the following is NOT true about high frequency trading?
Positions are still long term
A stock in the DJIA has a price of $30 and increases 10%, how many points would this add to the DJIA index?
3.0 points
Approximately what percentage of stocks listed on the NYSE are still traded on the physical exchange?
40%
which of the following is the largest options exchange?
CME group
Which of the following is true about a dealer?
Earns the spread between Bid and Ask price
What is the primary difference between Over the Counter markets and Organized Exchanges?
Over the Counter markets operate a competitive market maker model
What is the role of a designated market maker?
To ensure that there is a continuous market for shares
An order to buy or sell at the best available price as soon as the order reaches the exchange is known as a limit orders/
false
Floor trading is considerably more profitable and efficient than electronic trading
false
The majority of transactions take place in primary markets
false
The following statement would be considered which of the following choices? Sell 1000 shares of Ford stock at $20
limit order
Which state is true when evaluation the bid/ ask spreads?
sellers of the shares look for the highest bid price
which of the following is true about a broker?
serves as an agent to bring together buyers and sellers
