The bid ask bounce (a) Is where prices rise after good news (b) Is the difference between the dealer's bid price and the dealer's ask price (c) Is the difference between the dealer's ask price and the dealer's bid price (d) Is the difference between the dealer's bid price and the market maker's bid price
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- If an investor places a sell order with a stop price. When the stop price occurs, the order will be executed as a market order at the dealer's next available bid price. Group of answer choices True FalseIf you transmit a market buy order to the stock exchange, will you buy at the bid or the ask? a. Ask b. BidA market order instructs the Broker to buy or sell at a specific price or better True O False
- When a market order is placed, the price that is paid for the stock is the a. stock's fundamental value. b. market price at time of the execution. c. quoted price. d. market price at time of the quote.Describe the following in placing purchase or sale orders in the stock market: Market Limit Stop Stop Limit Give an example of each.Market liquidity risk is reflected in the size of the bid-ask spreads. Select one: True False
- Describe a situation when an investor would want to use a market order.Answer the following in a couple of sentences. e) Compare swaps with forwards f) Why do you buy on margin?The bid-ask spread: a. Includes a transaction cost component to compensate liquidity providers for their operational costs b. Includes an adverse selection component to compensate liquidity providers for the risk of trading with informed traders c. Includes a bid-ask bounce component to compensate liquidity providers for volatility d. (a) & (b) e. (a), (b) & (c)
- In part (b), why was the coupon payment added to the difference between the current and inital price?The underlying assumptions of technical analysis are that A.price move in predictable patterns B. Market value is determined by market news C. Investors are rationalwhat is the terminology for the lowest price listed on a stock market exchange at which an investor is willing sell a specific stock? A- market price B- buyer price C- Ask price D- bid price