Trivia Quiz: What Do You Know About Secondary Market?

2.

What is the function of a market maker?

Helps companies that are doing IPOs
Sells stocks on behalf of clients for a commission
Maintains an orderly market by buying or selling stock if their are no other buyers or sellers
Ensures that brokers do not defraud their customers

Correct Answer

A. Maintains an orderly market by buying or selling stock if their are no other buyers or sellers

Explanation

A market maker plays a crucial role in maintaining an orderly market by buying or selling stocks when there are no other buyers or sellers available. This helps to ensure that the market remains liquid and that there is always a counterparty for investors to trade with. By stepping in as a buyer or seller, the market maker helps to provide stability and prevent extreme price fluctuations.

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3.

How are stock prices determined in the secondary market?

They are set by the corporation's CFO
They are set by the corporation's Board of Directors
They are set by the SEC
Supply and demand

Correct Answer

A. Supply and demand

Explanation

Stock prices in the secondary market are determined by the forces of supply and demand. When there is a high demand for a particular stock, its price tends to increase. Conversely, when there is a low demand and a higher supply of a stock, its price may decrease. The interaction between buyers and sellers in the market ultimately determines the price at which stocks are traded. The actions and decisions of the corporation's CFO or Board of Directors may influence investor sentiment and affect supply and demand, but they do not directly set the stock prices. Similarly, while the SEC regulates and oversees the stock market, it does not determine individual stock prices.

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4.

A financial professional who assists investors in the secondary market by providing access to the exchanges:

Broker
Market maker
Investment banker
CFO

Correct Answer

A. Broker

Explanation

A broker is a financial professional who helps investors in the secondary market by providing them access to the exchanges. They act as intermediaries between buyers and sellers, executing trades on behalf of their clients. Brokers play a crucial role in facilitating the buying and selling of securities, such as stocks, bonds, and commodities. They provide market research, advice, and assistance in executing trades, ensuring that investors have access to the secondary market and can make informed investment decisions.

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5.

A stock exchange on which all trades are electronic (there is no physical place where trading takes place):

NYSE
NASDAQ
SEC
CFO

Correct Answer

A. NASDAQ

Explanation

NASDAQ is the correct answer because it is an example of a stock exchange that operates entirely electronically, without a physical trading floor. Unlike NYSE, which has a physical location in New York, NASDAQ is a global electronic marketplace where traders can buy and sell stocks through computer networks. SEC stands for the Securities and Exchange Commission, which is a regulatory body overseeing the securities industry, while CFO stands for Chief Financial Officer, a corporate executive responsible for managing financial operations.

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6.

One of the major stock exchanges:

Philadelphia Stock Exchange
NASDAQ
Technology Stock Exchange
Linked In

Correct Answer

A. NASDAQ

Explanation

NASDAQ is the correct answer because it is one of the major stock exchanges in the world. It is an American stock exchange that specializes in technology and growth companies. It is known for listing many high-profile technology companies such as Apple, Microsoft, and Amazon. NASDAQ is also known for its electronic trading system, which allows for fast and efficient trading of stocks. Overall, NASDAQ is a well-known and influential stock exchange in the global financial market.

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7.

If a corporation is concerned about its ability to meet listing requirements, the best place for its stock to trade is

On the NYSE
In the over the counter market
On the NASDAQ
None of the above have listing requirements

Correct Answer

A. In the over the counter market

Explanation

The best place for a corporation's stock to trade if it is concerned about meeting listing requirements is in the over the counter (OTC) market. Unlike the NYSE and NASDAQ, the OTC market does not have strict listing requirements, making it a more flexible option for the corporation. This allows the corporation to continue trading its stock even if it does not meet the stringent criteria set by the major exchanges.

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8.

Listing requirements vary among exchanges, but, in general, listing requirements do not require a corporation to have

A profitable history
A large market capitalization
A large number of shareholders
A history of paying dividends

Correct Answer

A. A history of paying dividends

Explanation

Exchanges typically do not require a corporation to have a history of paying dividends in order to be listed. This means that a corporation can still be listed on an exchange even if it has not paid dividends to its shareholders in the past. Listing requirements may vary among exchanges, but generally, profitability, market capitalization, and number of shareholders are more important factors for listing eligibility.

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9.

At present, most stock trades are done

By visiting the floor of the exchange
On the phone
Electronically
By placing an offer on ebay

Correct Answer

A. Electronically

Explanation

Currently, the majority of stock trades are conducted electronically. This means that traders can buy and sell stocks using computer systems and electronic networks, without the need to physically visit the trading floor of the exchange or communicate through phone calls. This method allows for faster and more efficient trading, as it eliminates the need for manual processes and enables instant execution of trades.

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10.

How many stocks are in the DOW?

3,500
2,000
500
30

Correct Answer

A. 30

Explanation

There are 30 stocks in the DOW. The DOW, also known as the Dow Jones Industrial Average, is a stock market index that represents the performance of 30 large and well-known companies listed on stock exchanges in the United States. These 30 stocks are carefully selected to provide a snapshot of the overall health and performance of the stock market.

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11.

Which exchange lists a large number of technology companies?

SEC
NYSE
NASDAQ
DOW

Correct Answer

A. NASDAQ

Explanation

NASDAQ is the correct answer because it is an exchange that primarily lists technology companies. It is known for being the world's first electronic stock market and has a large number of technology companies listed on its platform. Some of the biggest technology companies, such as Apple, Microsoft, and Amazon, are listed on NASDAQ.

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Trivia Quiz: What Do You Know About Secondary Market?

What happens if a stock is not listed?

Quiz Preview

What is the function of a market maker?

How are stock prices determined in the secondary market?

A financial professional who assists investors in the secondary market by providing access to the exchanges:

A stock exchange on which all trades are electronic (there is no physical place where trading takes place):

One of the major stock exchanges:

If a corporation is concerned about its ability to meet listing requirements, the best place for its stock to trade is

Listing requirements vary among exchanges, but, in general, listing requirements do not require a corporation to have

At present, most stock trades are done

How many stocks are in the DOW?

Which exchange lists a large number of technology companies?