Hello, Which of the following statements about trading shares of stock or market efficiency is least accurate? A) The uptick rule requires that the last trade in the security be at a price higher than the previous trade. B) Maintenance margin is the required percentage of an investor’s equity compared to the total value of the stock after the investor trades on margin. C) Block houses, where institutional traders buy and sell large blocks of shares, are also called upstairs traders. D) External efficiency means prices adjust rapidly to new information. Can somebody help me with an answer to this question? Tnkx
C–block houses :brokerage whose major concern is finding potential buyers and sellers of block trades Upstairs traders: What a trade in a listed stock is not executed through the listing exchange.Historically, in an upstairs trade buyers and sellers would negotiate the price and conditions of the trade in the “upstairs” rooms of a brokerage firm. Some exchanges prohibit upstairs trading. I looked up the definition to the two–I determined the answer through process of elimination.
It’s definitely A (had this one on schweser yesterday). It requires that the last sale be on at a higher price than the previous OR that the last sale be consummated at a price equal to the previous sale, given that that sale was at a higher price.
So 17 20 20 20 is ok but not 23 20 20 20 ?
That’s correct DanLieb
This is schweser’s explanation: Which of the following statements about trading shares of stock or market efficiency is least accurate? A) The uptick rule requires that the last trade in the security be at a price higher than the previous trade. B) Maintenance margin is the required percentage of an investor’s equity compared to the total value of the stock after the investor trades on margin. C) Block houses, where institutional traders buy and sell large blocks of shares, are also called upstairs traders. D) External efficiency means prices adjust rapidly to new information. Your answer: C was incorrect. The correct answer was A) The uptick rule requires that the last trade in the security be at a price higher than the previous trade. The uptick rule requires that either: (1) the last trade is at a price higher than the previous trade, or (2) the last trade is at the same price (a zero trade) and that the previous non-zero trade is at a price higher than the trade before it.
They should just get rid of this, uptick rule doesn’t exist anymore
for now…