Characters Of The Rules Of The Game

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2. The Stock Market Game pays dividends.

True

False

The statement "The Stock Market Game pays dividends" is true. Dividends are payments made by a company to its shareholders as a reward for their investment. In the context of the Stock Market Game, it is likely that participants receive virtual dividends based on the performance of the stocks they have chosen. This allows players to simulate the experience of investing in the stock market and understand the concept of dividends.

Explanation

The statement "The Stock Market Game pays dividends" is true. Dividends are payments made by a company to its shareholders as a reward for their investment. In the context of the Stock Market Game, it is likely that participants receive virtual dividends based on the performance of the stocks they have chosen. This allows players to simulate the experience of investing in the stock market and understand the concept of dividends.

3. A broker's fee of _____% is charged for all buy and sell orders.

The broker's fee for all buy and sell orders is 2%. This means that for every transaction made through the broker, 2% of the total value of the order is charged as a fee.

Explanation

The broker's fee for all buy and sell orders is 2%. This means that for every transaction made through the broker, 2% of the total value of the order is charged as a fee.

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4. For an investory "going on margin" (borrowing on the equity in your account), a _____% fee is charged for money borrowed.

When an investor "goes on margin" by borrowing on the equity in their account, a fee of 7% is charged for the money borrowed.

Explanation

When an investor "goes on margin" by borrowing on the equity in their account, a fee of 7% is charged for the money borrowed.

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5. SMG does not permit buying stocks that trade below $____ per share.

SMG does not permit buying stocks that trade below $5 per share. This means that investors using SMG cannot purchase stocks that are priced lower than $5. The answer options provided all indicate a value of $5 or lower, which aligns with the restriction set by SMG.

Explanation

SMG does not permit buying stocks that trade below $5 per share. This means that investors using SMG cannot purchase stocks that are priced lower than $5. The answer options provided all indicate a value of $5 or lower, which aligns with the restriction set by SMG.

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6. If an investor sells 200 shares of their Intel stock at $32 per share, they will be charged a broker's fee of $____ for the transaction.

The question asks for the broker's fee charged for selling 200 shares of Intel stock at $32 per share. The correct answer is $128. This can be calculated by multiplying the number of shares (200) by the price per share ($32), resulting in a total transaction value of $6,400. The broker's fee is then calculated as a percentage of the transaction value, which is typically around 2%. 2% of $6,400 is $128, hence the correct answer.

Explanation

The question asks for the broker's fee charged for selling 200 shares of Intel stock at $32 per share. The correct answer is $128. This can be calculated by multiplying the number of shares (200) by the price per share ($32), resulting in a total transaction value of $6,400. The broker's fee is then calculated as a percentage of the transaction value, which is typically around 2%. 2% of $6,400 is $128, hence the correct answer.

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7. Cash balances (money not yet spent) will be credited at an annual rate of ____%.

Cash balances will be credited at an annual rate of 2.2%.

Explanation

Cash balances will be credited at an annual rate of 2.2%.

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8. All buy orders must be a minimum of 50 shares.

True

False

The statement is false because not all buy orders must be a minimum of 50 shares. Buy orders can vary in size depending on the individual's preferences and the rules set by the exchange. There may be a minimum order size requirement set by the exchange, but it does not necessarily have to be 50 shares.

Explanation

The statement is false because not all buy orders must be a minimum of 50 shares. Buy orders can vary in size depending on the individual's preferences and the rules set by the exchange. There may be a minimum order size requirement set by the exchange, but it does not necessarily have to be 50 shares.

9. Investors must liquidate their portfolios at the end of the Game (liquidate means selling their stock to convert it back into cash).

True

False

Investors do not necessarily have to liquidate their portfolios at the end of the game. Liquidating a portfolio means selling the stocks and converting them back into cash, which may not be the preferred option for all investors. Some investors may choose to hold onto their stocks for a longer term or reinvest their earnings. Therefore, the statement is false.

Explanation

Investors do not necessarily have to liquidate their portfolios at the end of the game. Liquidating a portfolio means selling the stocks and converting them back into cash, which may not be the preferred option for all investors. Some investors may choose to hold onto their stocks for a longer term or reinvest their earnings. Therefore, the statement is false.

10. Investors can only trade common and preferred stock on the New York Stock Exchange, Nasdaq Stock Market, and the American Stock Exchange.

True

False

The given statement is false. Investors can trade not only common and preferred stock but also other financial instruments such as bonds, options, and exchange-traded funds (ETFs) on the New York Stock Exchange, Nasdaq Stock Market, and the American Stock Exchange. Therefore, the correct answer is false.

Explanation

The given statement is false. Investors can trade not only common and preferred stock but also other financial instruments such as bonds, options, and exchange-traded funds (ETFs) on the New York Stock Exchange, Nasdaq Stock Market, and the American Stock Exchange. Therefore, the correct answer is false.

11. Trades entered on a Friday at 6:30pm will receive the closing price for Monday (for End of Day Game).

True

False

This statement is true because trades entered on a Friday at 6:30pm will not be executed until the market opens on Monday. Therefore, the closing price for Monday will be applied to these trades in the End of Day Game.

Explanation

This statement is true because trades entered on a Friday at 6:30pm will not be executed until the market opens on Monday. Therefore, the closing price for Monday will be applied to these trades in the End of Day Game.

12. Investors can only enter trades between 9:00AM and 4:00PM Eastern Standard Time.

True

False

The statement is false because investors can enter trades outside of the 9:00AM to 4:00PM Eastern Standard Time window. This is because there are pre-market and after-hours trading sessions available, which allow investors to trade before the market opens or after it closes. These extended trading hours provide investors with more flexibility and opportunities to participate in the market.

Explanation

The statement is false because investors can enter trades outside of the 9:00AM to 4:00PM Eastern Standard Time window. This is because there are pre-market and after-hours trading sessions available, which allow investors to trade before the market opens or after it closes. These extended trading hours provide investors with more flexibility and opportunities to participate in the market.

13. Interest earned (and/or owed) is posted to the portfolio daily.

True

False

The statement is false because interest earned (and/or owed) is not posted to the portfolio daily. Interest is typically calculated and posted on a monthly or quarterly basis, depending on the terms of the investment or loan. Posting interest daily would require constant monitoring and adjustments, which is not a common practice.

Explanation

The statement is false because interest earned (and/or owed) is not posted to the portfolio daily. Interest is typically calculated and posted on a monthly or quarterly basis, depending on the terms of the investment or loan. Posting interest daily would require constant monitoring and adjustments, which is not a common practice.