Stock Advisor Stock Marketing Practices 4

Question 1

What does 'Regulation FD' (Fair Disclosure) prohibit?

Accepted Answer

Selective disclosure of material information to some investors

Answer

All public statements by companies

Answer

Paying dividends quarterly

Answer

Issuing press releases

Question 2

A 'stop-loss order' is designed to:

Accepted Answer

Limit losses by selling at a set trigger price

Answer

Guarantee profits

Answer

Increase margin requirements

Answer

Pay a dividend

Question 3

What is 'cornering the market'?

Accepted Answer

Gaining enough control to manipulate a security's price

Answer

Buying index funds

Answer

Selling at year-end

Answer

Holding cash reserves

Question 4

Under the 'Know Your Customer' (KYC) rule, a broker must:

Accepted Answer

Understand a client's financial profile and risk tolerance

Answer

Approve every trade automatically

Answer

Share client data publicly

Answer

Guarantee investment returns

Question 5

What is a 'short squeeze'?

Accepted Answer

Rising prices forcing short sellers to buy back shares

Answer

A drop in dividends

Answer

A regulatory fine

Answer

A stock split

Question 6

Which disclosure document must mutual funds provide detailing fees and objectives?

Accepted Answer

Prospectus

Answer

Tax return

Answer

Annual W-2

Answer

Credit report

Question 7

What does 'best execution' obligate a broker to do?

Accepted Answer

Seek the most favorable terms for client orders

Answer

Execute only at market open

Answer

Charge the highest commission

Answer

Delay all trades