Question 1

The approximate percentage of total ASX market capitalisation accounted for by all of the shares in the ASX 100 as at September 2013 is:

Accepted Answer

A) 46 per cent 
B) 63 per cent 
C) 74 per cent 
D) 80 per cent 
E) 81 per cent 
A) 46 per cent 
B) 63 per cent 
C) 74 per cent 
D) 80 per cent 
E) 81 per cent C

Question 2

High frequency trading relies on computer programs to identify arbitrage opportunities and automatically trade to take advantage of those opportunities.

Accepted Answer

A) True 
 B)False  True

Question 3

There is evidence that the entry of Chi-X to Australia has increased efficiency by lowering transaction costs.

Accepted Answer

A) True 
 B)False  True

Question 4

The settlement of share market trades:

Accepted Answer

A) requires the exchange of share certificates 
B) is performed electronically by CHESS 
C) occurs on a T + 1 basis 
D) is carried out by Computershare. 
E) None of these. 
A) requires the exchange of share certificates 
B) is performed electronically by CHESS 
C) occurs on a T + 1 basis 
D) is carried out by Computershare. 
E) None of these.

Question 5

Since the share market operates on a trading-day basis, it has processes for matching orders entered before the trading day starts.

Accepted Answer

A) True 
 B)False

Question 6

A buy-and-hold investment strategy is more prevalent in the bond market than in the share market.

Accepted Answer

A) True 
 B)False

Question 7

The ASX's share price indices are:

Accepted Answer

A) the sum of the share prices of the constituent companies 
B) weighted by share turnover 
C) weighted by market capitalisation 
D) the sum of the share prices of the constituent companies divided by the number of shares 
E) all accumulation indices. 
A) the sum of the share prices of the constituent companies 
B) weighted by share turnover 
C) weighted by market capitalisation 
D) the sum of the share prices of the constituent companies divided by the number of shares 
E) all accumulation indices.

Question 8

A short position in a CFD contract profits from increases in the share-price without the expense of buying the share.

Accepted Answer

A) True 
 B)False

Question 9

The ASX is listed on the ASX.

Accepted Answer

A) True 
 B)False

Question 10

The ASX uses an automatic trading system that matches buy and sell orders.

Accepted Answer

A) True 
 B)False

Question 11

The All Ordinaries Index (AOI)comprises all the ordinary shares listed on the ASX.

Accepted Answer

A) True 
 B)False

Question 12

The firms in the ASX 20 are not included in the ASX 200.

Accepted Answer

A) True 
 B)False

Question 13

'Small-cap companies' are those:

Accepted Answer

A) not in the ASX 100 
B) not in the ASX 200 
C) the 200 companies in the ASX 300 but not in the ASX 100 
D) the 100 companies in the ASX 200 but not in the ASX 100 
E) the 200 smallest listed companies. 
A) not in the ASX 100 
B) not in the ASX 200 
C) the 200 companies in the ASX 300 but not in the ASX 100 
D) the 100 companies in the ASX 200 but not in the ASX 100 
E) the 200 smallest listed companies.

Question 14

Discuss the role of the share market and how it influences the corporate governance of listed companies.

Accepted Answer

The share market plays a crucial role in

Question 15

Hamish is a day trader who forms the opinion that JB Hi Fi will fall from its current price of $18.50 to $18.He has $5000 to risk.The initial margin payment is 10%, ignoring brokerage costs.(a)What CFD order should Hamish place and what exposure does this achieve?
(b)Later that day, JB Hi Fi shares are trading at $18.Explain how Hamish can close-out his position and the profit or loss achieved.(c)Say instead the price increased to $19.Again explain how Hamish can close-out his position and the profit or loss achieved.

Accepted Answer

(a)With $5 000 Hamish can gain exposure

Question 16

ASX Trade:

Accepted Answer

A) is the ATS currently used by the ASX 
B) consists of three automated trading sub-systems 
C) was introduced by the ASX to improve its ability to compete with alternative trading arrangements 
D) operates on the principle of priority trading. 
E) All of these. 
A) is the ATS currently used by the ASX 
B) consists of three automated trading sub-systems 
C) was introduced by the ASX to improve its ability to compete with alternative trading arrangements 
D) operates on the principle of priority trading. 
E) All of these.

Question 17

Describe the dimensions of the Australian share market by considering the number of listed firms, and their size distribution.Assess the liquidity of the market and explain how liquidity can differ among listed firms.Support your comments with reference to the indicators of liquidity.

Accepted Answer

The Australian share market is a signifi

Question 18

The ASX has a second board for those companies that do not meet its listing requirements but for which there is substantial investor interest.

Accepted Answer

A) True 
 B)False

Question 19

The settlement of share trades is cumbersome because sellers must supply share certificates to the clearinghouse before receiving payment from the buyer.

Accepted Answer

A) True 
 B)False

Question 20

The average value of a trade in shares listed on the ASX has fallen since 2008 because of:

Accepted Answer

A) the emergence of high-frequency trading 
B) the prevalence of a 'buy-and-hold' attitude in the share market 
C) share prices being generally lower 
D) greater participation in the market by retail investors 
E) reduced investor interest in shares since the GFC. 
A) the emergence of high-frequency trading 
B) the prevalence of a 'buy-and-hold' attitude in the share market 
C) share prices being generally lower 
D) greater participation in the market by retail investors 
E) reduced investor interest in shares since the GFC.

The approximate percentage of total ASX market capitalisation accounted for by all of the shares in the ASX 100 as at September 2013 is:

High frequency trading relies on computer programs to identify arbitrage opportunities and automatically trade to take advantage of those opportunities.

There is evidence that the entry of Chi-X to Australia has increased efficiency by lowering transaction costs.

The settlement of share market trades:

Since the share market operates on a trading-day basis, it has processes for matching orders entered before the trading day starts.

A buy-and-hold investment strategy is more prevalent in the bond market than in the share market.

The ASX's share price indices are:

A short position in a CFD contract profits from increases in the share-price without the expense of buying the share.

The ASX is listed on the ASX.

The ASX uses an automatic trading system that matches buy and sell orders.

The All Ordinaries Index (AOI)comprises all the ordinary shares listed on the ASX.

The firms in the ASX 20 are not included in the ASX 200.

'Small-cap companies' are those:

Discuss the role of the share market and how it influences the corporate governance of listed companies.

ASX Trade:

Describe the dimensions of the Australian share market by considering the number of listed firms, and their size distribution.Assess the liquidity of the market and explain how liquidity can differ among listed firms.Support your comments with reference to the indicators of liquidity.

The ASX has a second board for those companies that do not meet its listing requirements but for which there is substantial investor interest.

The settlement of share trades is cumbersome because sellers must supply share certificates to the clearinghouse before receiving payment from the buyer.

The average value of a trade in shares listed on the ASX has fallen since 2008 because of:

Overview of the Financial System

The Payments System

Introduction to the Flow of Funds

Funds Management

Authorised Deposit-Taking Institutions

The Stability of Deposit-Taking Institutions

The Money Market

The Bond Market

Shares

Foreign Exchange and Global Capital Markets

Financial Futures

Swaps

Exchange-Traded Options

Filters

Exam 10: The Share Market

The approximate percentage of total ASX market capitalisation accounted for by all of the shares in the ASX 100 as at September 2013 is:

High frequency trading relies on computer programs to identify arbitrage opportunities and automatically trade to take advantage of those opportunities.

There is evidence that the entry of Chi-X to Australia has increased efficiency by lowering transaction costs.

The settlement of share market trades:

Since the share market operates on a trading-day basis, it has processes for matching orders entered before the trading day starts.

A buy-and-hold investment strategy is more prevalent in the bond market than in the share market.

The ASX's share price indices are:

A short position in a CFD contract profits from increases in the share-price without the expense of buying the share.

The ASX is listed on the ASX.

The ASX uses an automatic trading system that matches buy and sell orders.

The All Ordinaries Index (AOI)comprises all the ordinary shares listed on the ASX.

The firms in the ASX 20 are not included in the ASX 200.

'Small-cap companies' are those:

Discuss the role of the share market and how it influences the corporate governance of listed companies.

ASX Trade:

Describe the dimensions of the Australian share market by considering the number of listed firms, and their size distribution.Assess the liquidity of the market and explain how liquidity can differ among listed firms.Support your comments with reference to the indicators of liquidity.

The ASX has a second board for those companies that do not meet its listing requirements but for which there is substantial investor interest.

The settlement of share trades is cumbersome because sellers must supply share certificates to the clearinghouse before receiving payment from the buyer.

The average value of a trade in shares listed on the ASX has fallen since 2008 because of:

Overview of the Financial System

The Payments System

Introduction to the Flow of Funds

Funds Management

Authorised Deposit-Taking Institutions

The Stability of Deposit-Taking Institutions

The Money Market

The Bond Market

Shares

Foreign Exchange and Global Capital Markets

Financial Futures

Swaps

Exchange-Traded Options

Filters