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Test: Buying and Selling of Stocks - 2 - B Com MCQ


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10 Questions MCQ Test - Test: Buying and Selling of Stocks - 2

Test: Buying and Selling of Stocks - 2 for B Com 2024 is part of B Com preparation. The Test: Buying and Selling of Stocks - 2 questions and answers have been prepared according to the B Com exam syllabus.The Test: Buying and Selling of Stocks - 2 MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Buying and Selling of Stocks - 2 below.
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Test: Buying and Selling of Stocks - 2 - Question 1
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What does the YTD % CHG represent in a stock market quote?

Detailed Solution for Test: Buying and Selling of Stocks - 2 - Question 1
The YTD % CHG in a stock market quote represents the Year-to-Date Percentage Change of the stock price for the calendar year. It shows how much the stock price has changed since the beginning of the year. This percentage is adjusted for stock splits and dividends over 10 percent. Additional Fact: Monitoring the YTD % CHG can provide investors with insights into the performance of a particular stock compared to the overall market or other stocks in their portfolio.
Test: Buying and Selling of Stocks - 2 - Question 2
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What do the 52-week HI & LO numbers represent in a stock market quote?

Detailed Solution for Test: Buying and Selling of Stocks - 2 - Question 2
The 52-week HI & LO numbers in a stock market quote represent the highest and lowest prices the stock traded at during the last 52-week period. These numbers do not include the previous trading day. They may be adjusted for stock payouts or large dividends. Additional Fact: The 52-week HI & LO numbers can indicate the price range within which the stock has traded over the past year. This information can be useful for investors to assess the volatility and potential future movement of the stock.
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Test: Buying and Selling of Stocks - 2 - Question 3
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What does the PE ratio represent in a stock market quote?

Detailed Solution for Test: Buying and Selling of Stocks - 2 - Question 3
The PE ratio, or Price to Earnings Ratio, in a stock market quote represents the diluted per-share earnings divided by the closing price of the stock. It is a valuation metric that compares the stock price to the company's earnings per share. Additional Fact: The PE ratio is commonly used by investors to assess the relative value of a stock and determine if it is overvalued or undervalued compared to its earnings potential. A higher PE ratio may indicate that the stock is relatively expensive, while a lower PE ratio may suggest that the stock is relatively cheap.
Test: Buying and Selling of Stocks - 2 - Question 4
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What does the CLOSE number represent in a stock market quote?
Detailed Solution for Test: Buying and Selling of Stocks - 2 - Question 4
The CLOSE number in a stock market quote represents the last price the stock traded at that day. It is the price at which the stock's trading session ended. It does not necessarily mean that it will be the price at which the stock opens the next day. Additional Fact: The CLOSE number is important for investors to track as it reflects the final trading price of the stock for the day. Changes in the CLOSE number from one trading day to the next can indicate shifts in market sentiment and potential trends in the stock's price.
Test: Buying and Selling of Stocks - 2 - Question 5
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What is the downside of using a market order in trading options?
Detailed Solution for Test: Buying and Selling of Stocks - 2 - Question 5
The downside of using a market order in trading options is that the fill may occur at a slightly lower or higher price than expected. The price at which a market order is filled is determined by the best available price in the market at the time of execution, which can change rapidly. Additional Fact: Market orders in options trading are generally not recommended due to the potential for slippage, where the actual execution price differs from the expected price. Limit orders, on the other hand, provide more control over the execution price but may not guarantee immediate execution.
Test: Buying and Selling of Stocks - 2 - Question 6
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What does the VOL 100s number represent in a stock market quote?
Detailed Solution for Test: Buying and Selling of Stocks - 2 - Question 6
The VOL 100s number in a stock market quote represents the sales volume expressed with two zeros missing. For example, if the number reported is 1959, it means the sales volume for that stock was 195,900 for the day. An "f" indicates that four zeros are missing. These results are unofficial. Additional Fact: Monitoring the sales volume of a stock can provide insights into the level of investor interest and trading activity. Higher sales volume may indicate increased market liquidity and potentially greater price movement.
Test: Buying and Selling of Stocks - 2 - Question 7
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What is a limit order in trading?
Detailed Solution for Test: Buying and Selling of Stocks - 2 - Question 7
A limit order in trading is a request to buy or sell a security at a specific price or better. It establishes a maximum purchase price or minimum selling price. The order is filled if and only if it can be filled at the specified limit price or better. Additional Fact: Limit orders give traders more control over the execution price of their trades. By setting a specific price, traders can aim to buy at a lower price or sell at a higher price than the current market price. However, there is a possibility that a limit order may not be filled if the specified price is not reached.
Test: Buying and Selling of Stocks - 2 - Question 8
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What does a market order mean in trading?
Detailed Solution for Test: Buying and Selling of Stocks - 2 - Question 8
A market order in trading means a request to buy or sell a security at the best available price in the market. It is an order that must be filled as quickly as possible, without any negotiation process between the buyer and seller. Additional Fact: Market orders are executed immediately at the prevailing market price. While they offer speed and certainty of execution, they do not guarantee a specific price. The price at which a market order is filled may vary from the displayed bid or ask price due to market fluctuations and liquidity.
Test: Buying and Selling of Stocks - 2 - Question 9
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What is the advantage of using a limit order in options trading?
Detailed Solution for Test: Buying and Selling of Stocks - 2 - Question 9
The advantage of using a limit order in options trading is that it provides more control over the execution price. Traders can set a specific price at which they are willing to buy or sell, aiming for a better price than the current market price. Additional Fact: Limit orders can be particularly useful when trading options with wider bid-ask spreads. By placing a limit order at a lower price when buying or a higher price when selling, traders have the opportunity to potentially save money on their trades.
Test: Buying and Selling of Stocks - 2 - Question 10
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When is it appropriate to enter a market order in trading options?
Detailed Solution for Test: Buying and Selling of Stocks - 2 - Question 10
It is appropriate to enter a market order in trading options when immediate execution of the trade is essential. Market orders are filled as quickly as possible, without any negotiation process, ensuring the trade is executed promptly. Additional Fact: Traders may choose to enter a market order when they need to quickly enter or exit a position, especially in fast-moving markets. However, it is important to be aware that the fill price may differ from the expected price due to market fluctuations and liquidity.
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