Module 5

Question 1

Once financial instruments are issued in primary markets, they are then traded in ________.

Answer 1

secondary markets

Question 2

Secondary markets are like used _______.

Answer 2

car markets

Question 3

Are markets for currently outstanding securities, referred to as secondary securities. These securities were previously bought and owned and now being resold either by the initial investors or those who have purchased securities in the secondary market.

Answer 3

Secondary markets

Question 4

Provide liquidity for investors as they sell their financial securities when they need cash.

Answer 4

Secondary markets

Question 5

Provide liquidity and enhance the marketability of stocks in reducing the real cost of financing to business firms and expanding the possibilities for raising funds.

Answer 5

Secondary markets

Question 6

Refers to several exchanges in which shares of publicly held companies are bought and sold.

Answer 6

Stock Market

Question 7

Such financial activities are conducted through formal exchanges and via over-the-counter (OTC) marketplaces that operate under a defined set of regulations.

Answer 7

Stock Market

Question 8

A place where stockbrokers and traders buy and sell securities based on specific rules and regulations.

Answer 8

Stock Exchange

Question 9

A _______ does not own shares. Instead, it acts as a market where stock buyers connect with stock sellers.

Answer 9

stock exchange

Question 10

Is where different financial instruments are traded, including equities, commodities, and bonds.

Answer 10

Stock Exchange

Question 11

Bring corporations and governments, together with investors.

Answer 11

Exchanges

Question 12

Help provide liquidity in the market, meaning there are enough buyers and sellers so that trades can be processed efficiently without delays.

Answer 12

Exchanges

Question 13

Also ensure that trading occurs in an orderly and fair manner so important financial information can be transmitted to investors and financial professionals.

Answer 13

Exchanges

Question 14

A software system used to trade securities.

Answer 14

Trading Platforms

Question 15

It allows investors to open, close, and manage market positions online through a financial intermediary, such as an online broker.

Answer 15

Trading Platforms

Question 16

There are two types of trading platforms: (1) ________ and (2) ________.

Answer 16

1. commercial platforms
2. proprietary platforms

Question 17

Are designed for day traders and retail investors.

Answer 17

Commercial platforms

Question 18

They are characterized by ease of use and an assortment of helpful features, such as real-time quotes, international news feeds, live, interactive charts, educational content, and research tools.

Answer 18

Commercial platforms

Question 19

Are customized platforms developed by large brokerages and other financial institutions for their own trading activities.

Answer 19

Proprietary platforms

Question 20

These are not available to the public.

Answer 20

Proprietary platforms

Question 21

(1) ______ and (2) ______ are the key factors in determining stock prices.

Answer 21

1. Supply
2. demand

Question 22

All markets follow the basic economic law of (1) _______. If there are a lot of shares of any one company in the market, its prices go (2) ______. The (3) _____ of the shares drives the share prices up. If many are buying the stocks, it creates (4) _______ and raises prices (5) ______.

Answer 22

1. supply and demand
2. down
3. scarcity
4. demand
5. up

Question 23

Factors that affect Stock Prices (7)

Answer 23

1. Company activity
2. The state of the economy
3. Inflation
4. Interest rates
5. Consumer spending
6. World events
7. Major investors

Question 24

Is historical records of the prices at which a particular stock has traded over a specific period.

Answer 24

Stock Price Data

Question 25

It includes information such as the opening price, closing price, highest and lowest prices, and trading volume.

Answer 25

Stock Price Data

Question 26

Is crucial for analyzing trends, making investment decisions, and conducting technical analysis.

Answer 26

Stock Price Data

Question 27

Classifying stocks into boards enabled ______ to calculate stock indexes (indices) for each group.

Answer 27

PSE

Question 28

A measure of the price level of the shares listed in the exchange by the indicated category.

Answer 28

Stock index

Question 29

Reflects the prices of selected stocks.

Answer 29

Index

Question 30

It is useful as a track record of changes in stock prices over time.

Answer 30

Index

Question 31

PSE tracks four indices: (1) ________ and (2) _______, (3) ______, (4) _______, and (5) _____.

Answer 31

1. commercial 2. industrial 3. property 4. mining 5. oil

Question 32

The overall index, which is called the ________, is a composite of the four indices.

Answer 32

Philippine stock index (Phisix)

Question 33

Saldana (1997) listed the following prices in a trading day:

Answer 33

1. Open 2. Low 3. High 4. Close

Question 34

The stock price for the first transaction at the start of trading day

Answer 34

Open

Question 35

Low

Answer 35

The lowest stock price for transactions during the day

Question 36

The highest stock price for transactions during the day

Answer 36

High

Question 37

The stock price for the last transaction of the day

Answer 37

Close

Question 38

Volume in the stock market is the amount of stocks traded per period.

Answer 38

Stock Volume

Question 39

Traders usually have their own definitions of good ________. It's best to do your research to determine your preferred volume or consult a trading or investing professional.

Answer 39

trading volume

Question 40

If a stock has a trading volume of one, it means only ______ share was traded during the measured period.

Answer 40

one

Question 41

The number of shares traded in a given period.

Answer 41

Stock Volume

Question 42

Traders and investors use the metric to gauge the (1) _______ in a security to help them make trading decisions. When trading volume is up—whether it's buying or selling volume—it means the security is gaining (2) ______ and trading activity is (3) _______ .

Answer 42

1. interest 2. attention 3. increasing

Question 43

Are quantitative in nature and seek to interpret stock or financial index data in an attempt to forecast market moves.

Answer 43

Market Indicators

Question 44

Are a subset of technical indicators and are typically comprised of formulas and ratios.

Answer 44

Market Indicators

Question 45

They aid investors' investment/trading decisions.

Answer 45

Market Indicators

Question 46

Are some of the best market indicators that enable traders to analyze the stock price movements in the market by implementing technical analysis measures.

Answer 46

Economic Indicators

Question 47

A metric that's generated by the collection of information about certain parts of an economy.

Answer 47

Economic Indicators

Question 48

Can provide insight into overall economic health.

Answer 48

Economic Indicators

Question 49

They help policymakers, such as government employees and Federal Reserve board members, determine a course of action for the economy, as well as assist investors in their investment choices.

Answer 49

Economic Indicators

Question 50

The price of a stock is largely determined by (1) ________. If demand is high, the price tends to go (2) _______, and if supply is high, the price tends to go (3) _______.

Answer 50

1. supply and demand 2. up 3. down