Session 13: Market Organization, Market Indices, and Market Efficiency
Reading 55: Market Organization and Structure
LOS h: Compare and contrast market orders with limit orders.
Which of the following statements about securities markets is least accurate?
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A) |
Characteristics of a well-functioning securities market include: many buyers and sellers willing to trade at below market price, low bid-ask spreads, timely information on price and volume of past transactions, and accurate information on supply and demand. | |
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B) |
Secondary markets, such as the over-the-counter (OTC) market, provide liquidity and price continuity. | |
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C) |
A limit buy order and a stop buy order are both placed below the current market price. | |
A limit buy is placed below the current market price, but a stop buy order is placed above the current market price (stop buy orders are often placed to protect a short sale from a rising market).
The other choices are true. A well-functioning securities market includes the following characteristics:
- timely and accurate information on price and volume of past transactions.
- timely and accurate information on the supply and demand for current transactions.
- liquidity (as indicated by low bid-ask spreads).
- marketability.
- price continuity.
- depth (many buyers and sellers willing to transact above and below the current price).
- operational efficiency (low transaction costs).
- informational efficiency (rapidly adjusting prices).
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发表于 2011-3-29 16:13
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