Stocks Intermediate: Types of Stock Accounts

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
A short sale is executed when an investor thinks the value of the stock will _______.
Choose wisely. There is only one correct answer.
Drop. The investor sells the stock and then buys it back after it has fallen in price.
2.
A call option grants the owner the right to buy 100 shares of a particular security at a pre-determined price.
Choose wisely. There is only one correct answer.
True. A call option grants the owner the right to buy 100 shares of a particular security at a pre-determined price.
3.
A wrap account is one in which all associated costs are wrapped into a single fee.
Choose wisely. There is only one correct answer.
True. A wrap account is a brokerage account in which all associated costs--broker commissions, money management fees, and transaction costs--are wrapped into a single fee.
4.
The cash account is the most common type of securities account.
Choose wisely. There is only one correct answer.
True. The most common type of investor securities account is the cash account.
5.
In order for arbitrage to work, the security must be priced the same in the two separate markets.
Choose wisely. There is only one correct answer.
False. Arbitrage is done in an attempt to profit from temporary price differences in the security in the two separate markets.