Compare an organized exchange with the over-the-counter market.
Answer to relevant QuestionsVery briefly highlight the seven federal laws (discussed in this chapter) regulating the securities industry. Explain market, limit, and stop orders. In what situations would investors use stop orders? Explain. How many securities must you hold for adequate diversification? Does diversification eliminate all risk, or does some remain? Explain. Explain an investment’s risk premium. Is there some “set” number to use in stock analysis? Explain. Explain your rights and return potential as a common stockholder, bondholder, or preferred stockholder. Discuss whether one of these is better than the other two.
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