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

Tadawul, officially known as the Saudi Exchange, is the principal stock exchange of Saudi Arabia and the venue for trading listed securities.

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

T+2 means that the transfer of securities and cash between buyer and seller is completed two business days after the transaction date.

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

A market order is executed immediately at the prevailing best available price without specifying a price limit.

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

A limit order sets the maximum price a buyer will pay or the minimum price a seller will accept, ensuring the trade occurs only at or better than that price.

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

A trading halt suspends all buying and selling activity in the affected security until the exchange lifts the halt, typically to allow dissemination of material information.

CME-1 Practice Test

CME-1 Practice Test

CME-1 Trading Mechanisms & Market Operations