CMFAS Securities Products M2 4

Question 1

What is short selling?

Accepted Answer

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

Answer

Selling shares quickly

Answer

Selling shares below their face value

Answer

Selling only a small number of shares

Question 2

What is a blue-chip stock?

Accepted Answer

A stock of a well-established, financially sound large company

Answer

A stock that is painted blue

Answer

A newly listed stock

Answer

A penny stock

Question 3

What is a stock split?

Accepted Answer

Dividing existing shares into more shares, reducing the price per share proportionally

Answer

Dividing a company into two

Answer

Selling half of a company's shares

Answer

Combining two companies

Question 4

What is the bid-ask spread?

Accepted Answer

The difference between the price a buyer is willing to pay and a seller is willing to accept

Answer

The difference between the highest and lowest price in a day

Answer

The commission charged by a broker

Answer

The daily trading volume

Question 5

What is a credit rating for a bond?

Accepted Answer

An assessment of the issuer's ability to repay debt

Answer

The interest rate of the bond

Answer

The maturity date of the bond

Answer

The market price of the bond

Question 6

What is a structured deposit?

Accepted Answer

A deposit whose return is linked to the performance of an underlying asset

Answer

A normal fixed deposit

Answer

A deposit with no interest

Answer

A deposit that cannot be withdrawn