1. A trader wants to purchase Microsoft stock at $30.00 and no more. Microsoft's current price is $30.05. Which order is most appropriate for this trader?
Limit order
Stop-limit order
Market order
Stop order
2. Which of the following best describes the stock trading environment in the United States?
The NYSE dominates stock trading. Nasdaq is a distant second. No other major competitors exist.
The NYSE and Nasdaq dominate trading and have very little competition.
Alternative trading systems dominate leaving little role for the traditional exchanges like the NYSE or Nasdaq.
The NYSE and Nasdaq are leaders, but they face heavy competition from alternative trading systems and exchanges.
3. Which of the following represents an advantage of an ETF versus an open-end mutual fund?
ETFs often require a high initial investment, while mutual funds often require a low initial investment.
ETFs can invest in stocks all over the world. Mutual funds are restricted to investing in U.S. stocks only.
When trading an ETF, you know the price of the trade almost immediately. Mutual funds trade at prices determined at the end of the trading day.
ETFs can track an index like the S&P 500. Mutual funds cannot track indexes as they must be actively managed.