Modern Market Fundamentals Flashcards
Price discovery is:
a) where value changes hands
b) where price is in equilibrium
c) not recognized by fundamental traders
d) both a and b
d) both a and b
Float in an equity market is:
a) the amount of stock available for trading
b) the originator’s interest in the company
c) not a real term used in equity markets
d) never varies after the IPO
a) the amount of stock available for trading
Liquidity is characterized by:
a) high volume
b) a large float or open interest
c) tight bid–offer spreads
d) all of the above
d) all of the above
A rally in the market is caused by:
a) a lack of sellers
b) no strong hands to fight the buyers
c) more buyers than sellers
d) aggressive buyers
d) aggressive buyers
A market selloff is caused by:
a) a lack of buyers in the market
b) no strong hands to fight the sellers
c) more sellers than buyers
d) aggressive sellers
d) aggressive sellers
In a selloff, the weak hands are:
a) aggressive sellers
b) aggressive buyers
c) countertrend traders
d) both b and c
d) both b and c
Price gaps are created when:
a) buyers are active in the market
b) sellers are active in the market
c) there are no sellers to meet buyer demand
d) overnight geopolitical news is negative
c) there are no sellers to meet buyer demand
Futures markets are characterized by:
a) different-sized contracts for each product
b) an expiration date for trading
c) good-faith margin deposits
d) all of the above
d) all of the above
Stock index futures:
a) are a safe investment
b) mirror the underlying index
c) are settled in stock from the index
d) have no specific expiration date
b) mirror the underlying index
The Forex market:
a) is guaranteed by the Forex currency exchange
b) is dominated by large banks
c) has fixed expiration dates
d) is liquid for small traders
b) is dominated by large banks
