Reading 52: Organization and Functioning of Securities Ma exchange, specific, style, black, class

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1.Members of the exchange who act as brokers but do not work for a specific brokerage firm are referred to as:

A)   exchange brokers.

B)   commission brokers.

C)   registered brokers.

D)   floor brokers.

2.To maintain an orderly market you would expect to see the specialist:

A)   buying in an up market.

B)   selling in an up market.

C)   selling in a down market.

D)   closing the limit order book when the market makes abrupt moves.

3.An investor sold a stock short and is worried about rising prices. To protect himself from rising prices he would place a:

A)   stop order to sell.

B)   limit order to sell.

C)   limit order to buy.

D)   stop order to buy..

4.Which of the following statements about trading stocks or securities markets is FALSE?

A)   Commission brokers at the New York Stock Exchange trade for their own accounts.

B)   Limit orders are orders to buy or sell at a price away from the current market price.

C)   The NASDAQ is an example of an over-the-counter market.

D)   A stop-buy is placed above the market price to protect short sellers of a security.

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答案和详解如下：

1.Members of the exchange who act as brokers but do not work for a specific brokerage firm are referred to as:

A)   exchange brokers.

B)   commission brokers.

C)   registered brokers.

D)   floor brokers.

The correct answer was D)

Floor brokers are independent brokers that help other brokerage firms fill orders when they are unable to handle the volume of orders.

2.To maintain an orderly market you would expect to see the specialist:

A)   buying in an up market.

B)   selling in an up market.

C)   selling in a down market.

D)   closing the limit order book when the market makes abrupt moves.

The correct answer was D)

Specialists act as brokers handling the limit order book as well as dealers by buying and selling stocks for their own account to maintain an orderly market and provide liquidity when there is inadequate order flow. Therefore, in order to provide additional liquidity and maintain the market flow specialist would need to sell in an up market and buy in a down market.

3.An investor sold a stock short and is worried about rising prices. To protect himself from rising prices he would place a:

A)   stop order to sell.

B)   limit order to sell.

C)   limit order to buy.

D)   stop order to buy.

The correct answer was D)

A limit order to buy is placed below the current market price.

A limit order to sell is placed above the current market price.

A stop (loss) order to buy is placed above the current market price.

A stop (loss) order to sell is placed below the current market price.

A stop order becomes a market order if the price is hit.

4.Which of the following statements about trading stocks or securities markets is FALSE?

A)   Commission brokers at the New York Stock Exchange trade for their own accounts.

B)   Limit orders are orders to buy or sell at a price away from the current market price.

C)   The NASDAQ is an example of an over-the-counter market.

D)   A stop-buy is placed above the market price to protect short sellers of a security.

The correct answer was A)

Commission brokers trade for a brokerage firm. Registered traders trade on their own behalf.

cfaedu

答案和详解如下：

1.Members of the exchange who act as brokers but do not work for a specific brokerage firm are referred to as:

A)   exchange brokers.

B)   commission brokers.

C)   registered brokers.

D)   floor brokers.

The correct answer was D)

Floor brokers are independent brokers that help other brokerage firms fill orders when they are unable to handle the volume of orders.

2.To maintain an orderly market you would expect to see the specialist:

A)   buying in an up market.

B)   selling in an up market.

C)   selling in a down market.

D)   closing the limit order book when the market makes abrupt moves.

The correct answer was D)

Specialists act as brokers handling the limit order book as well as dealers by buying and selling stocks for their own account to maintain an orderly market and provide liquidity when there is inadequate order flow. Therefore, in order to provide additional liquidity and maintain the market flow specialist would need to sell in an up market and buy in a down market.

3.An investor sold a stock short and is worried about rising prices. To protect himself from rising prices he would place a:

A)   stop order to sell.

B)   limit order to sell.

C)   limit order to buy.

D)   stop order to buy.

The correct answer was D)

A limit order to buy is placed below the current market price.

A limit order to sell is placed above the current market price.

A stop (loss) order to buy is placed above the current market price.

A stop (loss) order to sell is placed below the current market price.

A stop order becomes a market order if the price is hit.

4.Which of the following statements about trading stocks or securities markets is FALSE?

A)   Commission brokers at the New York Stock Exchange trade for their own accounts.

B)   Limit orders are orders to buy or sell at a price away from the current market price.

C)   The NASDAQ is an example of an over-the-counter market.

D)   A stop-buy is placed above the market price to protect short sellers of a security.

The correct answer was A)

Commission brokers trade for a brokerage firm. Registered traders trade on their own behalf.

cfaedu

答案和详解如下：

1.Members of the exchange who act as brokers but do not work for a specific brokerage firm are referred to as:

A)   exchange brokers.

B)   commission brokers.

C)   registered brokers.

D)   floor brokers.

The correct answer was D)

Floor brokers are independent brokers that help other brokerage firms fill orders when they are unable to handle the volume of orders.

2.To maintain an orderly market you would expect to see the specialist:

A)   buying in an up market.

B)   selling in an up market.

C)   selling in a down market.

D)   closing the limit order book when the market makes abrupt moves.

The correct answer was D)

Specialists act as brokers handling the limit order book as well as dealers by buying and selling stocks for their own account to maintain an orderly market and provide liquidity when there is inadequate order flow. Therefore, in order to provide additional liquidity and maintain the market flow specialist would need to sell in an up market and buy in a down market.

3.An investor sold a stock short and is worried about rising prices. To protect himself from rising prices he would place a:

A)   stop order to sell.

B)   limit order to sell.

C)   limit order to buy.

D)   stop order to buy.

The correct answer was D)

A limit order to buy is placed below the current market price.

A limit order to sell is placed above the current market price.

A stop (loss) order to buy is placed above the current market price.

A stop (loss) order to sell is placed below the current market price.

A stop order becomes a market order if the price is hit.

4.Which of the following statements about trading stocks or securities markets is FALSE?

A)   Commission brokers at the New York Stock Exchange trade for their own accounts.

B)   Limit orders are orders to buy or sell at a price away from the current market price.

C)   The NASDAQ is an example of an over-the-counter market.

D)   A stop-buy is placed above the market price to protect short sellers of a security.

The correct answer was A)

Commission brokers trade for a brokerage firm. Registered traders trade on their own behalf.

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