Stock Advisor Stock Marketing Practices 3

Question 1

What is 'spoofing' in the context of stock trading?

Accepted Answer

Placing fake orders to manipulate prices

Answer

Buying on margin

Answer

Diversifying a portfolio

Answer

Reinvesting dividends

Question 2

A 'limit order' instructs a broker to:

Accepted Answer

Buy or sell at a specified price or better

Answer

Buy immediately at any price

Answer

Hold the position indefinitely

Answer

Sell only at market close

Question 3

What does 'suitability' require of a financial advisor recommending investments?

Accepted Answer

Recommendations must fit the client's needs and profile

Answer

Always recommend the highest-fee product

Answer

Only recommend the advisor's firm's stocks

Answer

Guarantee no losses

Question 4

Which term describes spreading false rumors to drive a stock's price down for profit?

Accepted Answer

Bear raid

Answer

Bull market

Answer

Stock split

Answer

Buyback

Question 5

What is the fiduciary duty owed by a registered investment advisor to clients?

Accepted Answer

Act in the client's best interest

Answer

Maximize the firm's commissions

Answer

Avoid all disclosures

Answer

Trade as often as possible

Question 6

A 'market maker' primarily provides which function?

Accepted Answer

Liquidity by quoting buy and sell prices

Answer

Government regulation

Answer

Tax collection

Answer

Credit ratings

Question 7

What is 'painting the tape'?

Accepted Answer

Coordinated trades to create false activity

Answer

Updating a stock chart

Answer

Issuing new shares

Answer

Paying a dividend