Stock Market Quiz

The 'bid' price in a stock market is:

• A. The price at which a stock is currently trading

• B. The highest price a buyer is willing to pay for a stock

• C. The price a seller is asking for a stock

• D. The average price of the last ten trades

The 'ask' price in a stock market refers to:

• A. The price at which the stock last traded

• B. The lowest price a seller is willing to accept for a stock

• C. The price a buyer is bidding for a stock

• D. The maximum price a stock reached during the trading day

A market order is best described as:

• A. An order to buy or sell a stock at a fixed price

• B. An order to sell a stock when it falls to a certain price

• C. An order to buy or sell a stock at the best available current price

• D. An order to buy a stock at a price lower than the current market price

A limit order is used to:

• A. Purchase a stock at the market price when the market opens

• B. Sell a stock at the market price when the market closes

• C. Buy or sell a stock at a specific price or better

• D. Prevent a stock from being sold below a certain price

A stop-loss order is designed to:

• A. Ensure a stock is sold at the highest possible price

• B. Limit an investor’s loss on a stock position by selling at a certain price

• C. Purchase a stock after its price rises to a certain level

• D. Automatically buy more shares as the price of a stock decreases

A stop-limit order:

• A. Turns into a limit order once the stop price is reached

• B. Becomes a market order when the stock reaches a certain price

• C. Is used to buy stocks at progressively higher prices

• D. Limits the number of shares you can buy to a specific amount

Trailing stop orders are orders where the stop price:

• A. Is set at a fixed amount below the market price and 'trails' the market price

• B. Is set at a fixed amount above the market price and does not move

• C. Can go up or down with the current market price

• D. Remains constant, regardless of market price changes

The bid-ask spread is:

• A. The commission paid to a broker for executing a trade

• B. The difference between the bid and ask prices of a stock

• C. The number of shares available for trading

• D. The fluctuation in stock price during a trading session

If an investor places a buy limit order, the order will be executed:

• A. Immediately at the current market price

• B. Only if the stock price falls to or below the limit price

• C. When the stock reaches a new 52-week high

• D. At any price above the limit price

A stop-loss order is triggered:

• A. When the stock price reaches the stop price and is executed at that price

• B. When the stock price rises above the stop price

• C. At the discretion of the investor, regardless of price

• D. When the stock price falls to or below the stop price and becomes a market order