CME-1 Trading Mechanisms & Market Operations

Question 1

What is the name of the Saudi stock exchange where listed securities are traded?

Accepted Answer

Tadawul (Saudi Exchange)

Answer

Murabaha Exchange

Answer

Riyadh Bourse

Answer

Gulf Securities Market

Question 2

In the Saudi capital market, what does the term 'T+2' settlement cycle mean?

Accepted Answer

Settlement of securities occurs two business days after the trade date

Answer

Trading takes place over two days

Answer

Two trading sessions are held per day

Answer

Two brokers must confirm each trade

Question 3

Which type of order instructs a broker to buy or sell a security immediately at the best available current price?

Accepted Answer

Market order

Answer

Limit order

Answer

Stop order

Answer

Good-till-cancelled order

Question 4

What is a 'limit order' in the context of securities trading?

Accepted Answer

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

Answer

An order that expires at the end of the trading day

Answer

An order restricted to institutional investors only

Answer

An order that triggers when a price threshold is reached

Question 5

During a trading halt called by the exchange, which of the following is TRUE?

Accepted Answer

All trading in the affected security is temporarily suspended

Answer

Only sell orders are suspended

Answer

Only block trades are prohibited

Answer

Trading continues but at reduced volumes

Question 6

What is the primary function of the Securities Depository Center (Edaa) in Saudi Arabia?

Accepted Answer

Maintaining the central registry of securities ownership and handling settlement

Answer

Setting margin requirements for broker-dealers

Answer

Publishing daily market prices for all listed securities

Answer

Approving new listings on the Saudi Exchange

Question 7

Which of the following best describes a 'short sale' in securities markets?

Accepted Answer

Selling borrowed securities with the intention of buying them back at a lower price

Answer

Selling securities held for less than one year

Answer

A sale completed in less than the standard settlement period

Answer

Selling securities at a price below their book value