1.5 Market Price Basics – QUIZ

What is the only reason for the movement of price in a free market? *

Changes in supply and demand

Changes in supply and/or demand

Changes in supply

Changes in demand

How many parties must be involved in any trade? *

Two parties

Three parties

Any number of parties

If a buyer comes into a stable market with a very large buy order, what is likely to happen? *

The market price will go up

The market price will go down

The market price will stay the same

What is a market order? *

All orders to buy in speculative markets are market orders

An order to buy or sell immediately, within defined boundaries

An order to buy or sell immediately, at whatever price can be obtained in the market

Stop loss orders are always stop orders *

True

False

The difference between stop orders and limit orders is best described as: *

Stop orders are not strictly to be entered at defined price levels, but limit orders are

Stop orders enter the market at a better price than the market price, but limit orders enter at a worse price

Stop orders enter the market at a worse price than the market price, but limit orders enter at a better price

Stop orders are always executed at a defined price or worse, while limit orders are always executed at a defined price or better *

True

False

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