Finance Quiz

Question 1 of 13

Which market is generally considered safer?

Options

Currencies

Bonds

Company stocks

Question 2 of 13

In what case would the spread be wider?

Neither would affect the spread

When the number of sellers outweighs the number of buyers

When shares are sold and bought regularly and are in high demand

Question 3 of 13

What doesn’t affect the spread?

Volume – if the amount of shares is changing hands quickly

Competition – how many other companies operate in the same market

Market volatility – both bad and good news, economic and company specific

Availability – how widely and easily the shares of a company can be traded

Question 4 of 13

Which of the following are highly illiquid?

Justin Bieber or Beyonce concert tickets

Stocks of Apple or Unilever

Cash

Complex financial instruments, such as derivatives

Question 5 of 13

Liquidity is about how quickly you can exchange, sell or re-sell an asset

False

True

Question 6 of 13

Which of the following is false about market makers?

They provide both the buy and the sell price of a financial security

They can buy and sell at any time and will buy a stock, even if they don’t have a buyer lined up

They bring buyers and sellers together

They provide a measure of liquidity with a ready-prepared bid-and-ask spread

Question 7 of 13

Spread margins are very thin for most market makers. But by trading millions of shares over the course of a day, they can make substantial profits.

True

False

Question 8 of 13

Which Stock Exchange is the biggest by market capitalisation?

London Stock Exchange (LSE)

Shanghai Stock Exchange (SSE)

New York Stock Exchange (NYSE)

Tokyo Stock Exchange (TSE)

Question 9 of 13

What does IPO mean?

Initial Public Offering

It's Probably Overpriced

Initial Player Offset

Immediate Profit Opportunities

Question 10 of 13

What does OTC mean?

Online Trading Company

Over The Counter

Other Than Clinton

Online Travel Company

Question 11 of 13

What does HFT mean?

Happy Fun Time

Human Factors in Telecommunications

High Frequency Trader

Horizontal Flight Test

Question 12 of 13

Assume the spread on an instrument is 5 cents. What is the ask price, if the bid price is $45.32?

$40.32

$45.37

$45.27

$45.32

Question 13 of 13

What is not the reason for which the difference between the “bid” and the “ask” spread has narrowed over the years for investors?

The Global Financial Crisis of 2008

Rising demand

Falling supply

Technological advancements

Looking for more?

Education Hub

You’ll find everything you need to know here; from how-to guides to investment strategies.

Trading Guides

Our in-depth guides will provide you some insights into the wide variety of financial instruments, their unique features and how to use them in your trading portfolio.

Trading Glossary

1988

That's the number of terms in our glossary.

Do you know your CFDs from your IPOs or ETFs? Remove the mystery with our definitions glossary.

See all

Term of the day

Spread (Difference)

What is spread? Despite sounding like something you might put in a sandwich, the spread definition is the difference between the bid price and ask price of an asset , security or commodity . What is spread in finance?...

The most common word

Currency

A currency is a form of money, usually issued by the public authorities in a particular jurisdiction. It performs three functions – it is a unit of account, a store of value and a medium of exchange. It is able to do so because firms and...