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US CMA Part 2 Financial Management and Securities Markets — practice questions — page 3

Explore 75 free Financial Management and Securities Markets questions in US CMA Part 2 Financial Management. Open each question or exercise to read its content, reference answers and available explanation.

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Financial Management and Securities Markets questions and exercises with answers

Showing questions 61–75 of 75.

How does an option differ from a futures contract?Read the answer and worked solution →Which is the oldest and most prestigious broker market, and when did it begin?Read the answer and worked solution →Broker markets account for about what share of the total dollar volume of shares traded in U.S. securities markets?Read the answer and worked solution →What share of annual share volume takes place on the regional exchanges?Read the answer and worked solution →What did the SEC's Regulation NMS make the most important factor in securities trades?Read the answer and worked solution →How do buyers and sellers transact in a dealer market?Read the answer and worked solution →What was the NASDAQ when it was founded in 1971?Read the answer and worked solution →The NASDAQ lists more companies than the NYSE. On which measure does the NYSE still lead?Read the answer and worked solution →Electronic communications networks let traders deal directly in what is known as which market?Read the answer and worked solution →What does the Securities Act of 1933 require of a new securities issue?Read the answer and worked solution →What is insider trading?Read the answer and worked solution →The Securities Investor Protection Corporation insures each customer's account up to what amount?Read the answer and worked solution →What does Regulation FD require of public companies?Read the answer and worked solution →How did the NYSE answer the NASDAQ's head start in electronic trading?Read the answer and worked solution →Since the Sarbanes-Oxley Act, what do CFOs consider their top priority?Read the answer and worked solution →

Worked practice questions

How does an option differ from a futures contract?

  1. An option pays interest while it is held
  2. An option obliges the holder to trade at maturity
  3. An option can never be sold before it expires
  4. An option entitles but does not oblige the holder
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Correct answer: D. An option entitles but does not oblige the holder

1. Futures contracts are legally binding obligations to buy or sell specified quantities of commodities or financial instruments at an agreed price at a future date. 2. Options entitle holders to buy or sell specified quantities at a set price during a specified time. 3. Unlike futures contracts, options do not legally obligate the holder to buy or sell. 4. The price paid for an option is also the maximum amount that can be lost, which caps the downside. 5. With both instruments the investor must correctly guess future price movements to earn a positive return. 6. Futures contracts pay no interest or dividends, and options have very short maturities, so it is easy to lose money quickly in either. _Source: OpenStax Introduction to Business (CC BY 4.0), Ch 16 "Understanding Financial Management and Securities Markets", section 16.6 Securities Markets_

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Which is the oldest and most prestigious broker market, and when did it begin?

  1. The NASDAQ, which has existed since 1971
  2. The AMEX, which has existed since 1792
  3. The NASDAQ, which has existed since 1792
  4. The NYSE, which has existed since 1792
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Correct answer: D. The NYSE, which has existed since 1792

1. Broker markets are national and regional securities exchanges that bring buyers and sellers together through brokers on a centralized trading floor. 2. The oldest and most prestigious of them is the New York Stock Exchange, which has existed since 1792. 3. Often called the Big Board, it sits on Wall Street in downtown New York City and lists the shares of some 2,400 corporations. 4. The NASDAQ was founded much later, in 1971, and it is a dealer market rather than a broker market. _Source: OpenStax Introduction to Business (CC BY 4.0), Ch 16 "Understanding Financial Management and Securities Markets", section 16.7 Buying and Selling at Securities Exchanges_

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Broker markets account for about what share of the total dollar volume of shares traded in U.S. securities markets?

  1. About 20 percent
  2. About 40 percent
  3. About 60 percent
  4. About 90 percent
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Correct answer: C. About 60 percent

1. Broker markets account for about 60 percent of the total dollar volume of all shares traded in U.S. securities markets. 2. Within that broker marketplace, the New York Stock Exchange alone represents 90 percent of the trading volume. 3. The 90 percent figure is the trap: it is a share of the broker segment, not of the whole market. 4. In a broker market the buyer purchases the securities directly from the seller through the broker. _Source: OpenStax Introduction to Business (CC BY 4.0), Ch 16 "Understanding Financial Management and Securities Markets", section 16.7 Buying and Selling at Securities Exchanges_

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