CFA Practice Question

There are 275 practice questions for this study session.

CFA Practice Question

An example of a call market is the ______

I. opening of the New York Stock Exchange, when numerous orders are received overnight.
II. setting of the market price by a NYSE specialist after the release of information that greatly alters the value of a security.
III. process used to clear outstanding trades on the NYSE after a prolonged halt in the trading of a stock.
Correct Answer: I, II and III

All of the above are examples of call markets. A call market is an auction where buyers and sellers submit bids and offers, and the price is determined at one point in time through the interaction of supply and demand.

User Contributed Comments 5

User Comment
sarath Call market when the trading is done at a specific time ....after some halt for some reaason like temporary blocking trading in the stock....
johntan1979 II: the setting of the market price by a NYSE specialist

Can people actually do THAT???
jonan203 he can if he is a dealer and has inventory of the stock.
fabsan Continuous market: Orders sent to the Exchange are simultaneously reflected on the market. For example, Stock A has a Bid of $10 and an Ask of $10.12. If I place an order to sell at $10.10, at the Exchange the Ask price will go down to $10.10 because I have the lower Ask. This is continuous, the exchange does not hold my order.
fabsan What I said above is also an Auction market by definition, because no matter the quantity I have wanted to sell at $10.10, the new ask quoted will be $10.10.
Call market: Like the name says, a Call market is called by the Exchange or a Dealer (On the OTC) at a specific time. For example in Canada, when the Bank of Canada sells Debt security, he does it on the Open market by calling the participants of the open market at a specific time.
You need to log in first to add your comment.