FP Obj 5.04

What is the difference between a stock’s ask price and buy price?

• The ask price is usually higher than the buy price.

• The ask price is the sell price, while the buy price is the bid price.

At a stock exchange, specialists have responsibility for:

• all of the trades made on a particular stock.

• all of the trades made for institutional stock investors.

Maggie wants to buy stock in PepsiCo but only when the price drops to a certain amount. What kind of order will she place?

• limit

• market

How can the general state of the economy affect a stock's price?

• by filtering out poor investments

• by increasing supply or demand

Stocks whose prices rise higher, or fall lower, than the market as a whole are referred to as:

• successful.

• volatile.

Which is a company-specific influence on a stock price?

• change in management

• government action

Which is the most likely result of institutional investors buying a number of shares of a company's stock?

• Analysts recommend that investors sell stock holdings of the company.

• Individual investors purchase shares of stock from the company.

Individual investors purchase shares of stock from the company.

• day order  

• all or none

How does a bull market affect a stock's price?

• by avoiding investment scams  

• by encouraging product purchases

When people invest in stocks, what primarily drives their actions?

• expectations

• information