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Quiz _1 KEY - Quiz Number 1 Financial Markets in the Global...

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Quiz Number 1 Financial Markets in the Global Society January 18, 2011 Name ___________________ (4.5 points per question…that means one extra point for everyone!!) 1) Give an example of a “market bubble” that took place in the 1600’s. Tulipmania (Worth noting—from the text: “….common to….. market booms: rumors fueling the boom, the rapid growth of leverage through the use of futures and paper credit, conspicuous consumption among speculators, sharply rising prices followed by sudden panic without cause, and initial government passivity followed by belated intervention.”) 2) Describe the difference between a hedger and a speculator. Hedger lays off risk in the market, speculator takes risk . 3) From the course packet (pg. 2)---“__________ is conventionally defined as an attempt to profit from changes in market price.” (A) Gambling (B) Speculation (C) Trading (D) Investing 4) Using a weather forecast to help predict a move in the soybean market is an example of fundamental analysis of a market. Using a price chart with trendlines and price patterns to help predict a move in a market is an example of what type of analysis? Technical analysis (charting) 5) Which of the following is NOT one of the advantages of an advantage of an organized marketplace? (A) Credibility of transactions (B) Transparency (C) Easy to make money (D) Confidence 6)
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