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W4D1
Security markets started as a centralized trading location that traded securities in an auction format. The largest of these exchanged that continues to have a physical location is the New York Stock Exchange (NYSE) (Block, et. al., 2022). When thinking of the NYSE, my mind always goes back to videos of brokers yelling back and forth acting as agents for buyers and sellers. While this can be exciting, it is inefficient. NASDAQ was created as an electronic stock exchange known for trading in technology stocks. NASDAQ has evolved over the years from just equities to options as well by acquiring the Boston and Philadelphia Exchanges. It also now owns three Canadian, four Nordic, and three Baltic exchanges (Block, et. Al., 2022). The requirements to be on the NASDAQ are lower than NYSE so many newer companies start their listing on NASDAQ. The Chicago Mercantile Exchange (CME) started in 1898 as the Chicago Butter and Egg Board (Block, et. al., 2022). This is where you would go if you had physical products to sell. It also allowed a buyer to lock in a price for “future” purchases. Over the years, the product available on the exchange grew dramatically, and shortly after 1972, currency futures were born (Block, et. al., 2022). As industries continued to grow and expand into international markets, it became important for companies to trade on foreign exchanges also. This all led to the creation of Electronic Communication Networks (ECN). The ECN can act as a broker-dealer or as an exchange to match orders between buyers and sellers (Block, et. al., 2022). There is no physical trading floor and if a company wishes to trade on the exchange, they must subscribe. The efficient market hypothesis has three forms. The first is the weak form. This indicates past information has no effect on future pricing. The semi strong form feels that all current public information is reflected in the price, while the strong form believes the price reflects all public and nonpublic information (Block, et. al., 2022). Ironically the strong form is illegal due to insider information. Dark pools match up buyers and sellers without making the trade public knowledge (Block, et. al., 2022). There are arguments both for and against this type of trading. The ones that are for this type of trading believe prices become more efficient and discourages high-frequency traders from entering the market. These against the process believe it makes the markets less liquid and that pricing can be more inefficient without all the public knowledge. Rivian is an electronic vehicle maker that raised $2.5 billion in private equity to T. Rowe Price in 2020 (Kunthara, 2021). According to Yahoo (2024), 28.52% of shares are held by insiders while 52.37% are held by institutions. The largest being Amazon.com at 16.54% followed by T. Rowe Price at 10.14% with Vanguard Group rounding out the top three at 7.13%. Not surprisingly, the top five mutual fund holdings are T. Rowe Price and Vanguard (Yahoo, 2024). Block, S. B., Hirt, G. A., & Danielsen, B. R. (2022). Foundations of financial management
(18th ed.)
. Kunthara, S. (2021, February 4). These were the largest funding rounds of
2020
. Crunchbase News. https://news.crunchbase.com/venture/largest-
funding-rounds-of-2020/#:~:text=These%20Were%20The%20Largest
%20Funding%20Rounds%20of%202020,8%20Epic%20Games%3A
%20%241.53%20billion%20...%20More%20itemsLinks to an external site.
Yahoo! (2024, February 25). Rivian Automotive, inc. (RIVN) stock major
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Related Questions
54) Which of the following is an electronic marketplace for buying and selling global stocks and
securities?
A) New York Stock Exchange
B) Over-the-counter market
C) NASDAQ
D) Tokyo foreign securities exchange
E) London foreign securities exchange
55) Jennifer Fritz is thinking about purchasing the stock of the Sunshine Corporation at the
current market price. What type of order should she place?
A) Market order
B) Limit order
C) Stop order
D) Discretionary order
E) Common order
56) Ashley Riley wants to buy the stock of XYZ Company at a specified price or better. What
type of order should she place?
A) Market order
B) Limit order
C) Stop order
D) Discretionary order
E) Common order
57) Carol Fisher wants to sell the stock of Hathaway International at the next available price after
the market price reaches $50 per share. What type of order should she place?
A) Market order
B) Limit order
C) Stop order
D) Discretionary order
E) Common order
58) A long-term technique used by investors…
arrow_forward
What comment can be made about this?
Investing in cryptocurrency can help provide diversification in a portfolio since historically, cryptos have shown no price correlation with the U.S. stock market (Levy, 2021). Also, unlike banks and other intermediaries, the blockchain is open 24/7, the transactions provide transparency plus anonymity because though the crypto wallet is viewable to the public, the owners of the wallets are anonymous. And, there is a lower risk of error since the transactions involve little human interaction (Voigt & Rosen, 2021).
arrow_forward
“If markets are efficient, you might as well select yourportfolio by throwing darts at the stock listings in the Wall StreetJournal”. The statement is true or false? Explain
arrow_forward
Securities exchanges create efficient markets that do all of the following EXCEPT
control the supply and demand for securities through price.
allocate funds to the most productive uses.
allow the price to be determined by supply and demand of securities.
ensure a market in which the price reflects the true value of the security.
arrow_forward
Suppose that a market exists where shares of stock trade on the floor of an exchange such as the the New York Stock Exchange (the NYSE). What do we call this type of market?
An efficient market
An auction market
O A direct trading market
A primary market
O A dealer market
arrow_forward
Which of the following is TRUE about blockchain financial transactions?
The complexity of blockchain-based payment solutions can present barriers to mass adoption, such as credit cards,
Bitcoin scalability improvements and advancements are why Bitcoin is now acceptable in most places and by most vendors.
Blockchain security concern is the primary reason why Bitcoin, Ethereum and other cryptocurrency still hasn't become a mainstream payment solution like credit cards.
Regulation has generally strangled the use of cryptocurrency and continues to remain the major barrier to adoption.
arrow_forward
Which of the following is uses electronic trading
1.The JSE
2.The Nasdaq
3.The NYSE
4.The Euronext T
5.he Tokyo Exchange
Explain your answer
arrow_forward
As a result of the COVID-19 crisis there was a global move to home working, and increased reliance on video conference facilities such as those offered by Zoom Video Communications. At the same time there was a sudden increase in trading volumes for Zoom Technology shares. The latter is a company that sells electronic technology for mobile phones. It was soon established that this was a clear case of mistaken identity. Please propose and explain a test for establishing whether the markets are efficient in this case.
arrow_forward
What benefits and negatives to you see with crypto? (CBDC 2022) (Kolakowski 2022)
In the age of crypto the public has looked to the FED for their perspective of the creation of a crypto for the U.S. in the form of a Central Bank Digital Currency. The FED describes that a, "CBDC transactions would need to be final and completed in real time, allowing users to make payments to one another using a risk-free asset." This debate is popular with the FED holding an open comment submission earlier this year with the public on the topic! Sadly, the submission period of 120 days has ended but here is the link to the PDF gallery of public comments: Federal Reserve Board - Public Comments (Links to an external site.). What does the group think about a nationally created crypto? (CBDC 2022)
A digestion article I recently enjoyed was useful as a guide to the massive original post by the FED here: Money and Payments: The U.S. Dollar in the Age of Digital Transformation (federalreserve.gov) (Links to…
arrow_forward
Security firms offer brokerage services, which allows customers to buy/sell stocks.
Group of answer choices
True
False
arrow_forward
The least risky capital market security isa. preferred stock.b. common stock.c. corporate bonds.d. treasury bonds
Which statement is true of digital legal tender?a. Digital legal tender replaces physical notes and coin.b. Digital legal tender issued into the economy will not save on costs associated with printingphysical notes.c. Distributed ledger technology can enable the central banks to issue a secure, transparent andefficient digital legal tender.d. Digital legal tender is worth more than physical notes
arrow_forward
1
How does the cryptocurrency trend affect businesses and consumers (both globally and domestically)?
arrow_forward
e 1:E1
OMANTEL
Practice (page 6 ..
moodle.nct.edu.om
Which of the following provides a
decentralized database or digital ledger of
transactions that everyone on the network
can see
а.
Crowd funding
Block Chain Technologies
С.
Crypto currencies
d.
Investment Banking,
II
arrow_forward
2. Types of financial markets
Financial markets across economies involve various kinds of participants and trade various types of assets and securities. It is important to understand the kinds of markets in which financial transactions take place.
You are preparing to take an exam in your finance class, and you’ve been making flash cards on different markets and transactions. Indicate the markets in which each of the following transactions will be traded:
Description of Transaction
Type of Market
Helen buys 1,000 shares of Microsoft stock through her online brokerage account.
Description of Transaction
Type of Market
You need gasoline now, so you drive to the gas station and purchase 10 gallons of gasoline.
Description of Transaction
Type of Market
Long-term mortgage-backed securities are traded between investors and issuers.
Description of Transaction
Type of Market
An investor holding…
arrow_forward
ICICIDirect is the first service in India to provide complete end-to-end integration forseamless electronic trading on the stock exchanges. This service will enable the user totie- in his trading bank account and his demat account to your brokerage accountelectronically. This integration of brokerage,demat and bank accounts ensures thatmoney is transferred to/from the user bank account and the shares are transferredfrom/to his demat account automatically without any paperwork.ICICIDirect keeps trackof the transactions, the settlement dates, and stock exchange rules.How is the web in this case enhances the convenience of customers? Derive the businessmodel of ICICIDirect in this case.
arrow_forward
2. Types of financial markets
Financial markets across economies involve various kinds of participants and trade various types of assets and securities. It is important to understand the kinds of markets in which financial transactions take place.
You are preparing to take an exam in your finance class, and you’ve been making flash cards on different markets and transactions. Indicate the markets in which each of the following transactions will be traded:
Description of Transaction
Type of Market
Helen buys 1,000 shares of Microsoft stock through her online brokerage account.
Finacial Assets or physical markets
Description of Transaction
Type of Market
A farmer agrees to sell 10,000 bushels of wheat at the rate of $4.50 per bushel to a buyer in three months. A regulated exchange, such as the Chicago Board of Trade, completes the transaction.
Futures or spot markets
Description of Transaction
Type of Market
Sheila…
arrow_forward
Which one of the following statements is true of E-commerce?
Question 13Answer
a.
It involves the exchange of an electronic item for cash.
b.
Banks are reducing their use of e-commerce platforms because of cyber attacks.
c.
Includes trading and transferring of funds by using computer networks.
d.
E-commerce is not as secure as traditional delivery channels.
arrow_forward
ICICIDirect is the first service in India to provide complete end-to-end integration for seamless electronic trading on the stock exchanges. This service will enable the user to tie- in his trading bank account and his demat account to your brokerage account electronically.This integration of brokerage ,demat and bank accounts ensures that money is transferred to/from the user bank account and the shares are transferred from/to his demat account automatically without any paperwork.ICICIDirect keeps track of the transactions ,the settlement dates, and stock exchange rules.How is the web in this case enhances the convenience of customers ?Derive the business model of ICICIDirect in this case.
arrow_forward
Which of the following best describes ECHO (Exchange Clearing House Limited)?
A digital sound system that produces repetitive sound waves.
A financial tool used to measure a country's economic output.
A global stock exchange platform used by major financial markets.
An international clearing house primarily for forex transactions.
arrow_forward
The NYSE is defined as a "spot" market purely and simply because it has a physical location. The Nasdaq, on the other hand, is not a spot market because it has no one central location.
arrow_forward
T or F
Organized security exchanges provide several benefits to both corporations and investors. They (l) provide a continuous market, (2) establish and publicize fair security prices, and (3) help businesses raise new financial capital.
Financial intermediary issues its own type of security which is called an indirect security.
Securities are first offered for sale in a primary market. These transactions increase the total stock of financial assets in existence in the economy.
arrow_forward
4. The over-the-counter securities market
is a good example of
a dealer market
O a direct search market
an auction market
a brokered market
arrow_forward
Semistrong form market efficiency states that the value of a security is based on:
Multiple Choice
all public and private information.
historical information only.
all publicly available information.
all publicly available information plus any data that can be gathered from insider trading.
random information with no clear distinction as to the source of that information.
arrow_forward
Use an internet search or a generative Al site to answer the following questions. Be sure to cite your sources.
You must post then comment on someone else's post.
1. What does it mean to have a long position in a stock?
2. What does it mean to have a short position in a stock?
3. Why is a short position risky?
4. Which kind of trade is sure to execute limit order or market order and why?
arrow_forward
A broker tells you that he has continuously outperformed the market by trading on publicly available information in the Hong Kong market. According to the Efficient Market Hypothesis, what would this imply? A) The market is weak form efficient. B) The market is semi-strong form efficient. C) The market is strong form efficient. D) The market is not efficient.
arrow_forward
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Related Questions
- 54) Which of the following is an electronic marketplace for buying and selling global stocks and securities? A) New York Stock Exchange B) Over-the-counter market C) NASDAQ D) Tokyo foreign securities exchange E) London foreign securities exchange 55) Jennifer Fritz is thinking about purchasing the stock of the Sunshine Corporation at the current market price. What type of order should she place? A) Market order B) Limit order C) Stop order D) Discretionary order E) Common order 56) Ashley Riley wants to buy the stock of XYZ Company at a specified price or better. What type of order should she place? A) Market order B) Limit order C) Stop order D) Discretionary order E) Common order 57) Carol Fisher wants to sell the stock of Hathaway International at the next available price after the market price reaches $50 per share. What type of order should she place? A) Market order B) Limit order C) Stop order D) Discretionary order E) Common order 58) A long-term technique used by investors…arrow_forwardWhat comment can be made about this? Investing in cryptocurrency can help provide diversification in a portfolio since historically, cryptos have shown no price correlation with the U.S. stock market (Levy, 2021). Also, unlike banks and other intermediaries, the blockchain is open 24/7, the transactions provide transparency plus anonymity because though the crypto wallet is viewable to the public, the owners of the wallets are anonymous. And, there is a lower risk of error since the transactions involve little human interaction (Voigt & Rosen, 2021).arrow_forward“If markets are efficient, you might as well select yourportfolio by throwing darts at the stock listings in the Wall StreetJournal”. The statement is true or false? Explainarrow_forward
- Securities exchanges create efficient markets that do all of the following EXCEPT control the supply and demand for securities through price. allocate funds to the most productive uses. allow the price to be determined by supply and demand of securities. ensure a market in which the price reflects the true value of the security.arrow_forwardSuppose that a market exists where shares of stock trade on the floor of an exchange such as the the New York Stock Exchange (the NYSE). What do we call this type of market? An efficient market An auction market O A direct trading market A primary market O A dealer marketarrow_forwardWhich of the following is TRUE about blockchain financial transactions? The complexity of blockchain-based payment solutions can present barriers to mass adoption, such as credit cards, Bitcoin scalability improvements and advancements are why Bitcoin is now acceptable in most places and by most vendors. Blockchain security concern is the primary reason why Bitcoin, Ethereum and other cryptocurrency still hasn't become a mainstream payment solution like credit cards. Regulation has generally strangled the use of cryptocurrency and continues to remain the major barrier to adoption.arrow_forward
- Which of the following is uses electronic trading 1.The JSE 2.The Nasdaq 3.The NYSE 4.The Euronext T 5.he Tokyo Exchange Explain your answerarrow_forwardAs a result of the COVID-19 crisis there was a global move to home working, and increased reliance on video conference facilities such as those offered by Zoom Video Communications. At the same time there was a sudden increase in trading volumes for Zoom Technology shares. The latter is a company that sells electronic technology for mobile phones. It was soon established that this was a clear case of mistaken identity. Please propose and explain a test for establishing whether the markets are efficient in this case.arrow_forwardWhat benefits and negatives to you see with crypto? (CBDC 2022) (Kolakowski 2022) In the age of crypto the public has looked to the FED for their perspective of the creation of a crypto for the U.S. in the form of a Central Bank Digital Currency. The FED describes that a, "CBDC transactions would need to be final and completed in real time, allowing users to make payments to one another using a risk-free asset." This debate is popular with the FED holding an open comment submission earlier this year with the public on the topic! Sadly, the submission period of 120 days has ended but here is the link to the PDF gallery of public comments: Federal Reserve Board - Public Comments (Links to an external site.). What does the group think about a nationally created crypto? (CBDC 2022) A digestion article I recently enjoyed was useful as a guide to the massive original post by the FED here: Money and Payments: The U.S. Dollar in the Age of Digital Transformation (federalreserve.gov) (Links to…arrow_forward
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