charged with acting for the public interest by maintaining an orderly market; simultaneously, they buy and sell for their own accounts in hopes of profiting from the spread between purchases and sales. Clearly, specialists must be closely regulated because of these potentially conflicting roles. 4-8. A specialist on the exchange often acts as a dealer, buying and selling for his or her own account. Nasdaq market makers may do the same thing. 4-9. NASD stands for the National Association of Security Dealers, a self- regulating body of brokers and dealers that oversaw Nasdaq and OTC practices. NASD licensed brokers and handled the punishment for violators of its prescribed fair practices. The NASD merged with the New York Stock Exchange's regulation committee in 2007, resulting in the Financial Industry Regulatory Authority, or FINRA. Nasdaq is an electronic screen-based equity securities market providing instantaneous transactions as market makers compete for investor orders. 4-10. An ECN is an Electronic Communication Network. Basically, ECNs are fully computerized trading networks that match buy and sell orders from investors without the use of a dealer. 4-15. The Dow-Jones Industrial Average is a price-weighted average of 30 large (blue-chip stocks) trading on the NYSE. The S&P 500 Composite Index is a market value index consisting of 500 stocks, with a base period set to 10 (1941-1943). These measures are the two most often-used indicators of what stocks in general are doing. The Dow-Jones Averages are supported by while the S&P 500 Index is the The Wall Street Journal, indicator most often used by institutional investors. 4-16. Blue chip stocks are large, well-established and well-known companies with long records of earnings and dividends. They are typically traded on the NYSE. Examples include Coca-Cola, General Electric, and Exxon Mobil. 4-17. The EAFE Index, or the European, Australia, and Far East Index, is a value-weighted index of the equity performance of major foreign markets. It is, in effect, a non- American world index.
charged with acting for the public interest by maintaining an orderly market; simultaneously, they buy and sell for their own accounts in hopes of profiting from the spread between purchases and sales. Clearly, specialists must be closely regulated because of these potentially conflicting roles. 4-8. A specialist on the exchange often acts as a dealer, buying and selling for his or her own account. Nasdaq market makers may do the same thing. 4-9. NASD stands for the National Association of Security Dealers, a self- regulating body of brokers and dealers that oversaw Nasdaq and OTC practices. NASD licensed brokers and handled the punishment for violators of its prescribed fair practices. The NASD merged with the New York Stock Exchange's regulation committee in 2007, resulting in the Financial Industry Regulatory Authority, or FINRA. Nasdaq is an electronic screen-based equity securities market providing instantaneous transactions as market makers compete for investor orders. 4-10. An ECN is an Electronic Communication Network. Basically, ECNs are fully computerized trading networks that match buy and sell orders from investors without the use of a dealer. 4-15. The Dow-Jones Industrial Average is a price-weighted average of 30 large (blue-chip stocks) trading on the NYSE. The S&P 500 Composite Index is a market value index consisting of 500 stocks, with a base period set to 10 (1941-1943). These measures are the two most often-used indicators of what stocks in general are doing. The Dow-Jones Averages are supported by The Wall Street Journal, while the S&P 500 Index is the indicator most often used by institutional investors. 4-16. Blue chip stocks are large, well-established and well-known companies with long records of earnings and dividends. They are typically traded on the NYSE. Examples include Coca-Cola, General Electric, and Exxon Mobil. 4-17. The EAFE Index, or the European, Australia, and Far East Index, is a value-weighted index of the equity performance of major foreign markets. It is, in effect, a non- American world index.
FIN352_Part1_answrs%20text.docx