Which of the Following Statements Is Incorrect

question 95

Multiple Choice

Which of the following statements is incorrect?

• A) Trading at the New York Stock Exchange and the American Stock Exchange are done by open outcry.
• B) Dealers create market liquidity in the Nasdaq's electronic market.
• C) The Dow Jones Industrial Average includes 35 of the largest companies in the United States.
• D) The Nasdaq contains many very large technology firms.

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Definitions:

Exercise Price

The specified price at which an option contract can be executed, typically referring to the buy (call) or sell (put) price for stocks.

3-for-1 Split

A stock split in which shareholders receive three shares for each share they hold, effectively reducing the stock price and making the shares more affordable, while keeping the overall valuation of the company the same.

Underlying Stock

Refers to the basic stock that an options or futures contract is based upon.

Options

Financial derivatives that give the buyer the right, but not the obligation, to buy or sell an underlying asset at an agreed-upon price within a certain period.