D) On the floor of the NYSE, market makers (known on the NYSE as specialists) match buyers and sellers.
Answer: B
Explanation: Ask prices exceed bid prices.
Diff: 2 Type: MC
Topic: 1.3 The Stock Market
Use the table for the question(s) below.
Consider the following two quotes for XYZ stock:
| November 11th | November 18th |
| Ask: 25.25 | Ask: 26.00 |
| Bid: 25.20 | Bid: 25.93 |
11) How much would you have to pay to purchase 100 shares of XYZ stock on November 18th?
A) $2,520
B) $2,525
C) $2,593
D) $2,600
Answer: D
Explanation: 100 shares × $26.00 (ask price) = $2,600
Diff: 1 Type: MC
Topic: 1.3 The Stock Market
12) How much would you receive if you sold 200 shares of XYZ stock on November 11th?
A) $5,050
B) $5,040
C) $5,186
D) $5,200
Answer: B
Explanation: 200 shares × $25.20 (bid price) = $5,040
Diff: 2 Type: MC
Topic: 1.3 The Stock Market
13) What are your net proceeds if you purchased 2,500 shares of XYZ stock on November 11th and then sold them a week later on November 18th?
Answer: Sell at bid price 11/18 = 2,500 × $25.93 = $64,825
Now subtract the price paid for the shares.
Buy at ask price 11/11 = 2,500 × $25.25 = $63,125
So net proceeds = $64,825 - $63,125 = $1,700
Your net proceeds are $1,700.
Diff: 3 Type: ES
Topic: 1.3 The Stock Market
14) Explain the main differences between the NYSE and NASDAQ stock markets.
Answer: Key points:
NYSE has a physical location—NASDAQ is an electronic market.
NYSE has one specialist in each stock and his role is to match buyers and sellers.
NASDAQ has multiple market makers (dealers) in each stock who stand ready to trade on their own accounts.
Diff: 3 Type: ES
Topic: 1.3 The Stock Market