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Quiz on Securities Trading

Total questions: 11

Worksheet time: 11mins

Name
Class
Date
1.

What is the primary market?

a)

Market for bond trading

b)

Market for existing securities

c)

Market for new issues of securities

d)

Market for private placements

2.

What is an Initial Public Offering (IPO)?

a)

A type of bond offering

b)

A private firm's first issue of shares to the public

c)

A sale of additional shares by a public company

d)

A method of trading in dark pools

3.

What is the bid price in dealer markets?

a)

The price at which the dealer is willing to sell

b)

The price at which the dealer is willing to buy

c)

The average price of securities

d)

The price at which investors can buy securities

4.

What is a market order?

a)

An order to buy or sell immediately at current market price

b)

An order that requires a broker's approval

c)

An order to buy or sell at a specified price

d)

An order that can be canceled at any time

5.

What is the maintenance margin?

a)

The minimum equity that must be kept in a margin account

b)

The percentage of equity in a short sale

c)

The initial margin requirement for buying on margin

d)

The total value of securities in a margin account

6.

What happens during a margin call?

a)

Investors are given a grace period to pay

b)

Investors are required to sell their securities

c)

Investors must deposit additional funds or securities

d)

Investors can withdraw their funds

7.

What is the purpose of underwriters in public offerings?

a)

To advise firms on terms for selling securities

b)

To buy securities for their own account

c)

To provide loans to investors

d)

To trade securities on the secondary market

8.

What is insider trading?

a)

Trading based on inside information

b)

Trading based on public information

c)

Trading that is regulated by the SEC

d)

Trading that occurs in dark pools

9.

What is a short sale?

a)

Borrowing shares to sell them at a higher price

b)

Buying shares with the expectation of price increase

c)

Selling shares that are owned by the investor

d)

Trading shares without any margin requirements

10.

What is the role of a stock exchange?

a)

To provide loans to companies

b)

To manage investment portfolios for clients

c)

To facilitate the buying and selling of securities

d)

To regulate the prices of commodities

11.

What is a limit order?

a)

An order that executes immediately at the market price

b)

An order that guarantees execution at any price

c)

An order to buy or sell at a specified price or better

d)

An order that can only be placed during market hours