- CFA Exams
- CFA Level I Exam
- Study Session 12. Equity Investments (1)
- Reading 36. Market Organization and Structure
- Subject 7. Secondary Security Market and Contract Market Structures
CFA Practice Question
A continuous market most likely exists for a stock when ______
A. trades occur at any time when the market is open and stocks are priced either by auction or by dealers.
B. new information about the company prospects is continuously released to market participants.
C. specialists or market makers attempt to derive new equilibrium prices in an orderly manner.
Explanation: In a continuous market, trades occur at any time when the market is open and the stocks are priced either by auction or by dealers. The dealers provide liquidity for investors by buying and selling the shares of stock for themselves.
User Contributed Comments 1
| User | Comment |
|---|---|
| Fpenae | Priced by: - Dealers -> Quoted driven markets or - Auction -> Orden driven markets So continuous markets refer to OTC and normal Stock exchanges. |