Question

A margin call occurs anytime the equity position of the margin account falls below the initial...

A margin call occurs anytime the equity position of the margin account falls below the initial margin.

A) True B) False C) No answer text provided D)No answer text provided.

The move to decimalization of stock prices has led to:

A) larger profits for dealers B)less risk for investors.C)more narrow spreads D) more volume in the market

The NYSE is: A) a free agent market.B)an auction market.C)a negotiated market.D)a dealer market.

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Homework Answers

Answer #1

1: b False

The margin call occurs when the equity position falls below the minimum required margin.

2: c: more narrow spreads

Decimalization refers to quoting security prices in decimals rather than fractions. This has led to narrower spreads due to smaller price increments and movements. It has no impact on profits, volume or risk.

3:b Auction market

The NYSE is the worlds leading auction market. The buyers and sellers enter their bids which are then matched in the auction market.

In negotiated market, the prices are bargained. In a dealer market such as NASDAQ dealers post prices at which they will buy or sell securities.Free agent market is not applicable to security markets.

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