SIE Exam Question 348: Answer and Explanation

Question: 348

The Nasdaq market is a(n)

• A. auction market.
• B. negotiated market.
• C. double-auction market.
• D. transfer market.

Correct Answer: A

Explanation:

A - Common stock is purchased by investors for its capital appreciation potential. Historically it has kept pace with the rate of inflation and is used to meet growth objectives. It is most junior in terms of claims to assets in a corporate liquidation, and does not protect investors from investment risk.