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NEW QUESTION: 1
Which of the following statements about securities markets is FALSE?
A. Characteristics of a well-functioning securities market include: many buyers and sellers willing to trade at below market price, low bid-ask spreads, timely information on price and volume of past transactions, and accurate information on supply and demand.
B. A limit buy order and a stop buy order are both placed below the current market price.
C. When Conglomerate, Inc. trades directly with MultiNational, Ltd., it is using the fourth market.
D. Secondary markets, such as the over-the-counter (OTC) market, provide liquidity and price continuity.
Answer: B
Explanation:
Explanation/Reference:
Explanation:
A limit buy is placed below the current market price, but a stop buy order is placed above the current market price (stop buy orders are often placed to protect a short sale from a rising market).
The other choices are true. A well-functioning securities market includes the following characteristics:
The fourth market is the direct exchange of securities (no intermediaries and no transaction costs).
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ACSP Exam Info
In case you haven’t done it yet, we strongly advise in reviewing the below. These are important resources related to the ACSP Exam.
ACSP Exam Topics
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ACSP Offcial Page
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