Future Business Leaders of America (FBLA) Securities and Investments Practice Test

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Study for the FBLA Securities and Investments Test. Enhance your financial expertise with well-crafted questions, hints, and detailed explanations. Get exam-ready today!

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What system does NASDAQ stand for?

National Association of Securities Dealers Automated Quotations
National Automated Stock Dealers Association Quotations
Networked Association of Securities and Dealers
National Automated Securities and Trading Quotations

The correct answer is: National Association of Securities Dealers Automated Quotations

The correct answer, National Association of Securities Dealers Automated Quotations, accurately reflects the origin and purpose of NASDAQ. Established in 1971, NASDAQ was created as a system to provide a platform for stock trading, and it was the first electronic exchange. The name emphasizes its role as an automated quotation service created by the National Association of Securities Dealers to facilitate trading and provide real-time pricing information for stocks not listed on traditional exchanges. This automated system significantly enhanced market efficiency and transparency, enabling investors to quickly access and execute trades. In contrast, the other options do not correctly represent the full and accurate meaning behind the acronym NASDAQ. They either misplace key concepts or do not accurately describe the organization's function or history. Understanding the correct terminology is crucial for anyone studying securities and investments, as it provides insight into the evolution of trading platforms and the regulatory framework governing them.