Finance And Accounting

Question: What does a limit order do?
A
It limits other traders' ability to buy the same stock.

B
When the stock price hits a certain trigger point, a market order to sell or buy a stock becomes effective.

C
It limits your taxation.

D
It limits how many transactions you can make in a day.

Note: Answer not sure
1. Report
Question: Why would an investor have an exit before entry?
A
Because they do not know how to trade properly

B
Because they are trading on margin

C
Because they are short selling a stock

D
Because they are writing options contracts

Note: Answer not sure
1. Report
Question: Why are margin requirements often lower for spread traders?
A
Because they do not have to pay taxes

B
Because they often do not trade on margin

C
Because they trade outside of the government's jurisdiction

D
Because they have opposing positions, with offsetting risk

Note: Answer not sure
1. Report
Question: Why is it dangerous for a day trader to place market orders?
A
Because they are illegal

B
Because there is a higher tax rate on the transactions

C
Because price changes can happen instantly and they may not receive the buy/sell price they hoped for

D
Because it may deplete their entire margin account

Note: Answer not sure
1. Report
Question: What would a day trader do to ensure that profits earned from a security are maintained without selling it immediately?
A
Place a stop loss order

B
Short sell the stock

C
Sell an options contract on the stock

D
Just watch the price and see what happens

Note: Answer not sure
1. Report
Question: How does a day trader fundamentally leverage their capital?
A
By referring friends to a brokerage and thus earning referral fees

B
By consistently buying and selling and thus increasing value

C
By not executing some transactions just to save the $10 commission

D
By not reporting their activity to the government

Note: Answer not sure
1. Report
Question: What is the main benefit of leveraging capital?
A
If the deal doesn't work, there is no obligation on the trader's part.

B
It has potential for substantially large returns using borrowed money.

C
It reduces taxes.

D
It allows them to avoid being classified as a day trader.

Note: Answer not sure
1. Report
Question: Why is it risky to utilize margin accounts?
A
Because if the transactions do not result in success, the trader will be responsible for paying for the losses

B
Because there are higher taxes on them

C
Because if other brokers know you are trading on margin, they will purposefully make your deal not work

D
Because it is illegal

Note: Answer not sure
1. Report
Question: Why is the ruling of a minimum margin often argued?
A
Because traders feel the government is impeding their ability to make decisions in their own best interest

B
Because it creates red tape in the process of becoming a day trader

C
Because it eliminates a lot of people's ability to become a full time day trader

D
Because the government has no authority to do so

Note: Answer not sure
1. Report
Question: What is the "futures market"?
A
An exchange for futures contracts on commodities

B
An exchange for stocks based on anticipated prices one year from now

C
An exchange for options contracts

D
An exchange for foreign currency

Note: Answer not sure
1. Report

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Question: What does a limit order do?

Question: Why would an investor have an exit before entry?

Question: Why are margin requirements often lower for spread traders?

Question: Why is it dangerous for a day trader to place market orders?

Question: What would a day trader do to ensure that profits earned from a security are maintained without selling it immediately?

Question: How does a day trader fundamentally leverage their capital?

Question: What is the main benefit of leveraging capital?

Question: Why is it risky to utilize margin accounts?

Question: Why is the ruling of a minimum margin often argued?

Question: What is the "futures market"?