Finance Quiz

Question 1 of 13

Which market is generally considered safer?

Currencies

Options

Company stocks

Bonds

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?

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

Competition – how many other companies operate in the same market

Volume – if the amount of shares is changing hands quickly

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

Question 4 of 13

Which of the following are highly illiquid?

Stocks of Apple or Unilever

Cash

Complex financial instruments, such as derivatives

Justin Bieber or Beyonce concert tickets

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 bring buyers and sellers together

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

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)

Tokyo Stock Exchange (TSE)

New York Stock Exchange (NYSE)

Shanghai Stock Exchange (SSE)

Question 9 of 13

What does IPO mean?

Immediate Profit Opportunities

It's Probably Overpriced

Initial Player Offset

Initial Public Offering

Question 10 of 13

What does OTC mean?

Online Travel Company

Online Trading Company

Over The Counter

Other Than Clinton

Question 11 of 13

What does HFT mean?

High Frequency Trader

Human Factors in Telecommunications

Happy Fun Time

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

$45.27

$45.37

$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?

Technological advancements

The Global Financial Crisis of 2008

Falling supply

Rising demand

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

1992

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

Bull Market

Searching for a bull market definition? When prices start rising and then continue to rise it’s known as a bull market. It’s when traders have confidence that prices are good, so they are optimistic about the future. The opposite of a bull...

The most common word

Financial Times Stock Exchange (Footsie)

The FTSE 100 definition is the same as the definition of the Financial Times Stock Exchange 100 Index, with the FTSE 100, or Footsie, being shortened names (or slang names) for the stock market index . The index comprises the top 100...