CMFAS Securities Products M2

Question 1

What is an ordinary share?

Accepted Answer

An ownership stake in a company with voting rights

Answer

A type of bond

Answer

A government security

Answer

A fixed deposit

Question 2

What is a bond?

Accepted Answer

A debt instrument where the issuer promises to repay the principal with interest

Answer

An ownership share in a company

Answer

A type of insurance policy

Answer

A savings account

Question 3

What is the difference between a market order and a limit order?

Accepted Answer

A market order executes immediately at the best available price; a limit order specifies a price

Answer

They are the same thing

Answer

A limit order is faster than a market order

Answer

Market orders are only for bonds

Question 4

What is a preference share?

Accepted Answer

A share that has priority over ordinary shares for dividends and asset distribution

Answer

A share that anyone prefers to buy

Answer

A share that can only be bought by institutions

Answer

A share with unlimited voting rights

Question 5

What is an initial public offering (IPO)?

Accepted Answer

The first time a company offers its shares to the public

Answer

A private sale of shares

Answer

A type of corporate bond

Answer

A government grant

Question 6

What is a dividend?

Accepted Answer

A portion of a company's profits distributed to shareholders

Answer

A fee charged by a broker

Answer

A type of stock exchange

Answer

A government tax