Questions from Personal Finance


Q: Describe a typical stock transaction at the New York Stock Exchange (

Describe a typical stock transaction at the New York Stock Exchange (NYSE). What are floor traders? What are specialists? What other exchanges trade stocks in a similar manner to the NYSE?

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Q: What are electronic communications networks (ECNs)? How are ECNs used

What are electronic communications networks (ECNs)? How are ECNs used?

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Q: How is the market for a stock created? How do brokerage

How is the market for a stock created? How do brokerage firms expedite this process? Compare the two types of brokerage services.

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Q: What are some advantages of using online brokerage services? Describe how

What are some advantages of using online brokerage services? Describe how an investor would set up and use an online brokerage account.

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Q: What information must you provide when placing an order to buy or

What information must you provide when placing an order to buy or sell stock? What is a ticker symbol, and why is it important?

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Q: Discuss the differences between a market order, a limit order,

Discuss the differences between a market order, a limit order, and a stop order.

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Q: What is buying a stock on margin? What may happen if

What is buying a stock on margin? What may happen if the value of the stock bought on margin declines? What are the advantages to investors and brokerage firms when stocks are bought on margin?

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Q: Why is it necessary to analyze a firm? What is an

Why is it necessary to analyze a firm? What is an annual report? What information does it contain to aid the analysis?

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Q: Recall that the Sampsons have a goal of saving about $300

Recall that the Sampsons have a goal of saving about $300 per month ($3,600 per year) for their children’s college education. They want to estimate how this money would grow over time if they invest i...

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Q: List the characteristics of a firm that investors analyze by using the

List the characteristics of a firm that investors analyze by using the balance sheet and the income statement.

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