Stock Jobs Stock Institutions and Financial Markets 2

Question 1

What is the primary function of a stock exchange?

Accepted Answer

To provide a regulated marketplace for buying and selling securities

Answer

A stock exchange provides an organized, regulated venue where securities are bought and sold between investors.

Question 2

Which market is where companies first sell shares to the public?

Accepted Answer

Primary market

Answer

The primary market is where new securities are issued and sold to investors for the first time, such as in an IPO.

Question 3

What does SEC stand for in U.S. financial regulation?

Accepted Answer

Securities and Exchange Commission

Answer

The Securities and Exchange Commission is the U.S. agency that regulates securities markets and protects investors.

Question 4

A broker-dealer acts as an agent when it:

Accepted Answer

Executes trades on behalf of a client

Answer

Acting as an agent (broker) means executing trades on behalf of clients rather than trading from its own account.

Question 5

What is the secondary market?

Accepted Answer

Where investors trade previously issued securities among themselves

Answer

In the secondary market, existing securities are traded between investors without the issuing company receiving proceeds.

Stock Jobs Practice Test