Question 1

In the Australian share market, a relatively small number of very large companies dominate the market.

Accepted Answer

A) True 
 B)False

Question 2

Briefly explain the contributions made by the share market to the financial system.

Accepted Answer

The answer of Briefly explain the contributions made by the...

Question 3

What is the role of the ASX 200? Describe how the S&P Australian Index Committee determine the shares in this index.

Accepted Answer

The answer of What is the role of the ASX...

Question 4

The ASX automated trading system does NOT:

Accepted Answer

A) facilitate trading on a 24/7 basis 
B) conduct auctions to determine a single opening and closing price 
C) close (except for enquiries)between 7 p.m.and 7 a.m. 
D) allow brokers and online investors to enter orders during the 7 a.m.to 10 a.m.pre-opening phase 
E) permit brokers to amend or cancel orders during the after-hours adjust phase.

Question 5

The share market performs price discovery, for example by determining entry and exit values for investors.

Accepted Answer

A) True 
 B)False

Question 6

Discuss the trading and settlement arrangements used by the Australian Securities Exchange.

Accepted Answer

The answer of Discuss the trading and settlement arrangements used...

Question 7

Explain high-frequency trading.Why is a retail trader unable to use the same trading strategy?

Accepted Answer

The answer of Explain high-frequency trading.Why is a retail trader...

Question 8

Chi-X:

Accepted Answer

A) is an organisation that has established a second exchange in Australia 
B) specialises in servicing the retail share trading market 
C) is the new trading system that has replaced CLICK XT 
D) trades all listed shares. 
E) None of these.

Question 9

A share price index level considered in isolation conveys no useful information.

Accepted Answer

A) True 
 B)False

Question 10

In order to conduct a secondary market for shares, the ASX:

Accepted Answer

A) sets the rules for the admission of companies to the market 
B) establishes trading and settlement arrangements 
C) discloses trading information, such as individual share prices 
D) promotes itself as a market for securities. 
E) All of these.

Question 11

Market integrity on the ASX is monitored by ASX Markets Supervision Pty Ltd.

Accepted Answer

A) True 
 B)False

Question 12

Give an overview of the ASX's admission and listing rules.Refer to the ASX website for additional information.

Accepted Answer

The answer of Give an overview of the ASX's admission...

Question 13

The ASX is facing competition from:

Accepted Answer

A) Chi-X and CFDs 
B) high frequency trading and CFDs 
C) high frequency trading and Chi-X 
D) Chi-X and 'dark pools' 
E) 'dark pools" and CFDs.

Question 14

As a monopoly, the ASX does not have to contend with competition.

Accepted Answer

A) True 
 B)False

Question 15

All else the same, an accumulation index is a better benchmark for a broad equity portfolio's return than is an otherwise identical price (non-accumulation)index.

Accepted Answer

A) True 
 B)False

Question 16

The ASX was formed from the amalgamation of the state-based exchanges.

Accepted Answer

A) True 
 B)False

Question 17

Explain contracts for difference and demonstrate how an investor can use these contracts in strategies to profit from forecasted increases and decreases in share values.

Accepted Answer

The answer of Explain contracts for difference and demonstrate how...

Question 18

The functions of the share market do NOT include:

Accepted Answer

A) performing price discovery by revealing the value of shares 
B) endowing listed securities with liquidity 
C) setting the price for IPOs 
D) disciplining the behaviour of a company's top management. 
E) developing a pool of investors.

Question 19

An investment in a CFD contract finishes when:

Accepted Answer

A) the contract expires 
B) the contract is sold in the secondary market 
C) the trader closes-out the position with a reversing trade 
D) 90 days after issue. 
E) None of these.

Question 20

All else the same, trading on the ASX is cheaper under an ATS than under open outcry.

Accepted Answer

A) True 
 B)False

Exam 10: The Share Market

In the Australian share market, a relatively small number of very large companies dominate the market.

Briefly explain the contributions made by the share market to the financial system.

What is the role of the ASX 200? Describe how the S&P Australian Index Committee determine the shares in this index.

The ASX automated trading system does NOT:

The share market performs price discovery, for example by determining entry and exit values for investors.

Discuss the trading and settlement arrangements used by the Australian Securities Exchange.

Explain high-frequency trading.Why is a retail trader unable to use the same trading strategy?

Chi-X:

A share price index level considered in isolation conveys no useful information.

In order to conduct a secondary market for shares, the ASX:

Market integrity on the ASX is monitored by ASX Markets Supervision Pty Ltd.

Give an overview of the ASX's admission and listing rules.Refer to the ASX website for additional information.

The ASX is facing competition from:

As a monopoly, the ASX does not have to contend with competition.

All else the same, an accumulation index is a better benchmark for a broad equity portfolio's return than is an otherwise identical price (non-accumulation)index.

The ASX was formed from the amalgamation of the state-based exchanges.

Explain contracts for difference and demonstrate how an investor can use these contracts in strategies to profit from forecasted increases and decreases in share values.

The functions of the share market do NOT include:

An investment in a CFD contract finishes when:

All else the same, trading on the ASX is cheaper under an ATS than under open outcry.