Finance Quiz

Question 1 of 13

Which market is generally considered safer?

Currencies

Company stocks

Bonds

Options

Question 2 of 13

In what case would the spread be wider?

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

When the number of sellers outweighs the number of buyers

Neither would affect the spread

Question 3 of 13

What doesn’t affect the spread?

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

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

Question 4 of 13

Which of the following are highly illiquid?

Complex financial instruments, such as derivatives

Justin Bieber or Beyonce concert tickets

Cash

Stocks of Apple or Unilever

Question 5 of 13

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

True

False

Question 6 of 13

Which of the following is false about market makers?

They bring buyers and sellers together

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

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

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

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 Player Offset

Initial Public Offering

Immediate Profit Opportunities

It's Probably Overpriced

Question 10 of 13

What does OTC mean?

Over The Counter

Online Trading Company

Online Travel Company

Other Than Clinton

Question 11 of 13

What does HFT mean?

Human Factors in Telecommunications

High Frequency Trader

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

$45.32

$45.37

$45.27

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?

Falling supply

The Global Financial Crisis of 2008

Technological advancements

Rising demand

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Trading Glossary

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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.

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Term of the day

Diversification

Looking for a diversification definition? Diversification is a strategised form of risk management. It's a technique that incorporates an assortment of investments that are part of a portfolio. The aim is to minimise risk or volatility by...

The most common word

Liquidity

Every asset has a liquidity, from property to your collection of antiques and even the cash in your bank. However solid they may seem, they can be converted into money in your hands. And that's asset liquidity. How quickly an asset can be...