Stock Jobs Stock Institutions and Financial Markets 4

Question 1

What is short selling?

Accepted Answer

Selling borrowed shares hoping to buy them back at a lower price

Answer

Short selling involves borrowing and selling shares, aiming to repurchase them later at a lower price for profit.

Question 2

What is a mutual fund?

Accepted Answer

A pooled investment vehicle managed by professionals

Answer

A mutual fund pools money from many investors to buy a diversified portfolio managed by professionals.

Question 3

Which market handles short-term debt instruments under one year?

Accepted Answer

Money market

Answer

The money market deals in short-term debt instruments with maturities of one year or less.

Question 4

What is the NASDAQ known for?

Accepted Answer

Being an electronic exchange heavy with technology stocks

Answer

The NASDAQ is an electronic exchange known for listing many technology and growth companies.

Question 5

What is a clearinghouse in financial markets?

Accepted Answer

An intermediary that ensures trades settle and obligations are met

Answer

A clearinghouse acts as a middleman that guarantees and settles trades between buyers and sellers.

Stock Jobs Practice Test