Question 1 of 13
Which market is generally considered safer?
- Company stocks
Question 2 of 13
In what case would the spread be wider?
- When the number of sellers outweighs the number of buyers
- Neither would affect the spread
- 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
- Market volatility – both bad and good news, economic and company specific
- Competition – how many other companies operate in the same market
- 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
- Complex financial instruments, such as derivatives
Question 5 of 13
Liquidity is about how quickly you can exchange, sell or re-sell an asset
Question 6 of 13
Which of the following is false about market makers?
- They can buy and sell at any time and will buy a stock, even if they don’t have a buyer lined up
- They provide a measure of liquidity with a ready-prepared bid-and-ask spread
- They provide both the buy and the sell price of a financial security
- They bring buyers and sellers together
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.
Question 8 of 13
Which Stock Exchange is the biggest by market capitalisation?
- Shanghai Stock Exchange (SSE)
- Tokyo Stock Exchange (TSE)
- New York Stock Exchange (NYSE)
- London Stock Exchange (LSE)
Question 9 of 13
What does IPO mean?
- Initial Public Offering
- It's Probably Overpriced
- Immediate Profit Opportunities
- Initial Player Offset
Question 10 of 13
What does OTC mean?
- Over The Counter
- Other Than Clinton
- Online Travel Company
- Online Trading Company
Question 11 of 13
What does HFT mean?
- Horizontal Flight Test
- Happy Fun Time
- Human Factors in Telecommunications
- High Frequency Trader
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?
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?
- Rising demand
- Falling supply
- Technological advancements
- The Global Financial Crisis of 2008