Chapter 1 (part 4)

Question 1

What are 3 Financial Markets?

Answer 1

1. Stock market
2. Bond market
3. Money market

Question 2

What is a Primary market?

Answer 2

When securities are sold by companies and government for the first time. As well as IPO’s

Question 3

What is a Secondary market?

Answer 3

The exchange of stocks from investor to investor. The issuer does not receive funds, only in the initial issuing of shares does the company receive proceeds.

Question 4

What is the “bid”?

Answer 4

The highest price a buyer is willing to pay for a security.

Question 5

What is the “ask”?

Answer 5

The lowest price a seller is willing to accept.

Question 6

What is the “spread”?

Answer 6

The difference between the bid and the ask.

Question 7

What is the “last price”?

Answer 7

The price at which the last trade on that stock took place.

Question 8

What is a stock exchange?

Answer 8

A place where buyers and sellers meet to trade. Prices are established according to supply and demand.

Question 9

What are the 3 Characteristics of a liquid market?

Answer 9

1. Frequent sales
2. Narrow price spread between bid and ask
3. Small price fluctuations from sale to sale

Question 10

What the 7 Canadian stock exchanges?

Answer 10

1. TSX
2. TSX Venture
3. Alpha Exchange
4. Montreal Exchange (MX)
5. Natural Gas Exchange (NGX)
6. CSE
7. ICE futures Canada