Question 1

When an employee executes a personal trade in advance of a client's or institution's order to benefit from the anticipated movement in the market price following the execution of a large trade, it is called:

Options :

A : forward-facing

B :

insider dealing

C : front running

D : ex ante trading

Answer: C

Question 2

How can material divergences between the value of cash and collateral be managed in a documented sell/ buy-back?

Options :

A : Margin maintenance

B : Either of the above, but usually (b)

C : Either of the above, but usually (a)

D : Re-pricing

Answer: B

Question 3

Brokers should confirm all transactions:

Options :

A : Only if the transaction is not for a marketable amount.

B : To both counterparties immediately by fax or other acceptable electronic means.

C : Only if the deal is between overseas counterparties and for value today.

D : Initially by fax or other acceptable electronic means, then in writing.

Answer: B

Question 4

What needs to be done in the event that a trade is amended by one or both parties?

Options :

A : A new confirmation should be generated and the confirmation cycle should restart and continue until the trade is completely matched by both parties.

B : A new confirmation should be generated by both parties but there is no need to restart the confirmation cycle.

C : A new confirmation need not be generated but the confirmation cycle must restart and continue until the trade is completely matched by both parties.

D : The amending party should verbally inform the other party.

Answer: A

Question 5

Dealers are authorized to deal:

Options :

A :

anywhere, even away from their own dealing premises

B : after-hours, but only from their private residence

C : after-hours, but only if listed as such by management

D : away from their broker-s dealing premises

Answer: C

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