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Securities Products M2 Flashcards

6 cards from real CMFAS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 Securities Products M2 flashcards as text

  1. What is short selling?

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

    Short selling involves borrowing shares and selling them, hoping to buy them back later at a lower price to return to the lender and profit from the difference.

  2. What is a blue-chip stock?

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

    Blue-chip stocks are shares of large, well-established, and financially stable companies with a history of reliable performance.

  3. What is a stock split?

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

    In a stock split, a company divides its existing shares into multiple shares. A 2-for-1 split doubles the number of shares while halving the price.

  4. What is the bid-ask spread?

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

    The bid-ask spread is the difference between the highest price a buyer will pay (bid) and the lowest price a seller will accept (ask).

  5. What is a credit rating for a bond?

    Answer: An assessment of the issuer's ability to repay debt

    A credit rating evaluates the creditworthiness of the bond issuer — the likelihood they will meet their debt obligations. Ratings like AAA, AA, BBB indicate quality.

  6. What is a structured deposit?

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

    A structured deposit has returns linked to the performance of underlying financial instruments like equities, interest rates, or currencies.

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  1. ibf.org.sg — Eligibility, fees, score release, registration, retake policy, exam format, passing score, time limit · verified Oct 2026