Stock Jobs Stock Market Liquidity 3

Question 1

Market depth refers to what?

Accepted Answer

The volume of orders available at various price levels

Answer

The total number of listed companies

Answer

The age of the exchange

Answer

The number of analysts covering a stock

Question 2

A large order that pushes a stock's price significantly is said to have caused what?

Accepted Answer

Market impact

Answer

A stock split

Answer

A dividend cut

Answer

An IPO

Question 3

Which type of order tends to provide liquidity rather than consume it?

Accepted Answer

A limit order resting in the book

Answer

A market order

Answer

A stop-loss triggered at market

Answer

A fill-or-kill market order

Question 4

Liquidity tends to be highest during which part of the U.S. trading day?

Accepted Answer

The open and the close

Answer

Midday lunch hours only

Answer

Overnight sessions

Answer

Weekends

Question 5

An ETF's liquidity is influenced not only by its own volume but also by what?

Accepted Answer

The liquidity of its underlying holdings

Answer

Its ticker length

Answer

The fund manager's age

Answer

The number of share classes

Question 6

Which scenario best illustrates 'slippage'?

Accepted Answer

An order fills at a worse price than expected due to thin liquidity

Answer

A dividend is paid late

Answer

A stock is delisted

Answer

A company restates earnings

Question 7

Why is liquidity considered a form of risk for investors?

Accepted Answer

You may be unable to sell at a fair price when you need to

Answer

It guarantees losses

Answer

It eliminates volatility

Answer

It fixes the share price permanently