EQUITY INVESTMENTS EXAMINATION SET ACTUAL TEST PAPER QUESTIONS CORRECT ANSWERS

EQUITY INVESTMENTS EXAMINATION SET ACTUAL TEST PAPER QUESTIONS CORRECT
ANSWERS GRADED A PLUS




Question:
GTC order.

Answer:
Good Til Cancel Investor specifies that an order remain active until it is canceled



Question:
Buy 50 shares, limit 12.5, GTC.

Answer:
Buy as many shares (up to 50) at 12.5 or under, keep order open until closed



Question:
Market Order.

Answer:
Just take best possible to fill order



Question:
Brokered Markets.

Answer:
Where investors use brokers to locate a counterparty to a trade; Useful with unique or illiquid
securities; Dealers do not carry inventory; Too few trades to trade in an order-driven market



Question:

, Order-driven markets.

Answer:
A market (generally an auction market) that uses rules to arrange trades based on the orders that
traders submit; in their pure form, such markets do not make use of dealers.



Question:
Quote Driven Markets.

Answer:
Investors trade with dealers; Dealers keep an inventory of securities; Most securities other than
stocks trade in quote driven markets; Trading is often electronic



Question:
writer of a put and the holder of a call.

Answer:
have a long exposure to the underlying asset because their positions increase in value if the
underlying asset value increases



Question:
Buyer of a put option.

Answer:
has the right to SELL the underlying asset at the strike price on or before expiration date



Question:
Price Return.

Answer:
index uses only the prices of securities; no dividends