Q1. Which of the following is least likely a characteristic of a well-functioning market?

A)   Prices change significantly from one transaction to the next.

B)   Reliable information is available on price and volume.

C)   Prices adjust quickly when new information becomes available.

Q2. Which of the following statements about the financial markets is least accurate?

A)   The New York Stock Exchange sets the initial margin requirements for stocks.

B)   Exchange listed stocks trading over the counter are called the third market.

C)   The National Association of Securities Dealers Automated Quotation system (NASDAQ) is an electronic quotation system for the OTC market.

Q3. In a well-functioning securities market:

A)   portfolio managers assist clients with diversifying globally to reduce systematic risk.

B)   participants have timely information on the prices and volumes of transactions.

C)   major news announcements usually coincide.

答案和详解如下：

Q1. Which of the following is least likely a characteristic of a well-functioning market?

A)   Prices change significantly from one transaction to the next.

B)   Reliable information is available on price and volume.

C)   Prices adjust quickly when new information becomes available.

Correct answer is A)

In a well-functioning market, prices should not typically change much from one transaction to the next because many buyers and sellers are willing to trade at prices near the current price. Characteristics of a well-functioning market include availability of reliable information on prices and transaction volume; liquidity (marketability and price continuity); prices that react quickly to new information; and low transactions costs.

Q2. Which of the following statements about the financial markets is least accurate?

A)   The New York Stock Exchange sets the initial margin requirements for stocks.

B)   Exchange listed stocks trading over the counter are called the third market.

C)   The National Association of Securities Dealers Automated Quotation system (NASDAQ) is an electronic quotation system for the OTC market.

Correct answer is A)

The Federal Reserve sets margin requirements.

Q3. In a well-functioning securities market:

A)   portfolio managers assist clients with diversifying globally to reduce systematic risk.

B)   participants have timely information on the prices and volumes of transactions.

C)   major news announcements usually coincide.

Correct answer is B)

The other statements are false. In an efficient market, portfolio managers assist clients with diversifying globally to reduce unsystematic risk. Systematic risk is not diversifiable. One assumption of efficient markets is that the timing of a news announcement is independent of the timing of other news announcements.

thanks

Thanks

thanks

thanks la