Question 7 for details on margin trading see pages

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Unformatted text preview: see page 254. Question 7 For details on margin trading see pages 258–260. Question 8 There are various types of information that can be useful in the investment process. Some of the key types are the following: 1) 2) Economic developments and current events (see page 261) Industry and company information (see page 261) 1 © 2009 Reed International Books Australia Pty Limited trading as LexisNexis: Solutions by Peter O’Brien for Chapter 7: Making Securities Transactions, Financial Planning in Australia, 3rd ed, by Taylor, Juchau & Houterman 3) 4) Price information (see page 262) Stock Market Averages and Indices (see pages 262–263) Question 9 See page 262. Question 10 See pages 262–263. Question 11 Price-weighted averages give higher-priced shares more weight in determining the performance of the index. Solutions to Problems 2 © 2009 Reed International Books Australia Pty Limited trading as LexisNexis: Solutions by Peter O’Brien for Chapter 7: Making Securities Transactions, Financial Planning in Australia, 3rd ed, by Taylor, Juchau & Houterman Problem 1 MM is Money Market, CM is Capital Market (a) MM (b) CM (c) CM (a) Secondary Market (d) CM (e) CM (b) Yes Problem 2 Problem 3 (a) Secondary Market (b) No Problem 4 (a) John doesn’t buy any shares and the...
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