Indicative Quote

### What is an indicative quote? - [x] A non-binding price given as a guide to current market prices. - [ ] A firm offer to buy or sell a financial asset. - [ ] A mandatory price for executing trades. - [ ] A locked-in quoted price that cannot change. > **Explanation:** An indicative quote is a non-binding price provided to clients for informational purposes and reflects current market conditions. ### Can an indicative quote be used to execute a trade? - [ ] Yes, it can be used as a firm order. - [x] No, it is for informational purposes only. - [ ] Only during market hours. - [ ] Only for high-volume trades. > **Explanation:** An indicative quote cannot be used to execute trades; it is solely provided as a reference for current market prices. ### How frequently do indicative quotes change? - [x] They can change frequently based on market conditions. - [ ] Once every trading day. - [ ] They rarely change. - [ ] Once a week. > **Explanation:** As indicative quotes reflect current market prices, they can change frequently with the movements in the financial markets. ### Why are indicative quotes provided by brokers? - [x] To give clients an idea of current market values and conditions. - [ ] To secure a transaction price. - [ ] To guarantee a fixed rate for trades. - [ ] To replace firm quotes. > **Explanation:** Brokers provide indicative quotes to help clients understand market conditions and approximate values of financial instruments. ### What should you remember when you receive an indicative quote? - [ ] It is a mandatory execution price. - [x] It is not a guaranteed trade price. - [ ] It will not change. - [ ] It is a commitment from the broker. > **Explanation:** An indicative quote is not a guaranteed trade price and actual transaction prices can differ based on market dynamics. ### Is there any obligation to execute a trade at an indicative quote? - [ ] Yes, you must trade at that price. - [ ] Only in foreign exchange markets. - [x] No, there is no obligation. - [ ] Only under SEC supervision. > **Explanation:** There is no obligation to execute a trade at an indicative quote since it is not an enforceable commitment. ### What is the difference between an indicative quote and a firm quote? - [x] An indicative quote is non-binding, while a firm quote is a binding offer to trade. - [ ] They are the same. - [ ] An indicative quote can only be used for certain securities. - [ ] A firm quote can change, while an indicative quote cannot. > **Explanation:** An indicative quote is non-binding and offers a current price guide, whereas a firm quote is a binding commitment to trade at the quoted price. ### What types of financial instruments can have indicative quotes? - [ ] Only stocks. - [ ] Only bonds. - [x] Various financial instruments including stocks, bonds, currencies, and commodities. - [ ] Only real estate. > **Explanation:** Indicative quotes can be provided for various financial instruments such as stocks, bonds, currencies, and commodities. ### Why might indicative quotes change frequently? - [ ] Due to broker preferences. - [ ] Inflation rates. - [x] Market price fluctuations. - [ ] Exchange closures. > **Explanation:** Indicative quotes reflect the current market prices which are subject to constant fluctuations affecting the quoted values. ### How should investors use indicative quotes? - [x] As a reference to understand market conditions and potential costs. - [ ] As the exact price for executing trades. - [ ] To demand a trade at the quoted price. - [ ] To finalize a trade agreement. > **Explanation:** Investors should use indicative quotes as a reference to comprehend market conditions and potential transaction values.