Test Questions Flashcards
1
Q
True or False: A stop-limit order activates a limit order when the market reaches the stop level.
A
True
2
Q
A market order is executed immediately, regardless of the direction of the tick. Why?
A
It used to be that short sales could only be executed on upticks, but this rule was abolished in 2007.
3
Q
Which of the following statements regarding short sales is (are) correct?
I. The brokerage firm arranges for another investor to lend the stock that is sold short.
ii. The investor can use the proceeds from the short sale to purchase other equities.
A
I only. II is incorrect because the proceeds from the sale are left on deposit as collateral.
