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Question 1 of 10
1. Question
Which of the following statement is not considered correct while promoting a material:
I. Promotional content that supports existing arguments use outdated information
II. Promotional material that does not claim research beyond what the Member has or has a reasonable capacity to provide
III. Promotional material which declares that any report, analysis or other services will be provided free of charge
IV. The use of promotional material that is likely to deceive the public
Correct
According to NFA Rule 2-29, NFA has always considered the following items to be violations of these Rules:
(A) Promotional content that supports existing arguments uses outdated information.
(B) Promotional material that does not say work beyond what the Member has or is capable of providing.
(C) Promotional material which makes any statement that any report, analysis or other services will be provided free of charge or free of
charge, unless such report, analysis or other service is or will be provided completely free of charge and without condition or
obligation.
Incorrect
According to NFA Rule 2-29, NFA has always considered the following items to be violations of these Rules:
(A) Promotional content that supports existing arguments uses outdated information.
(B) Promotional material that does not say work beyond what the Member has or is capable of providing.
(C) Promotional material which makes any statement that any report, analysis or other services will be provided free of charge or free of
charge, unless such report, analysis or other service is or will be provided completely free of charge and without condition or
obligation.
Question 2 of 10
2. Question
Which information should be stated in performance information used by FCMs, IBs, and their Associates?
Correct
According to NFA Rule 2-29, The quality data used by FCMs, IBs, and their associates must include the date of each initial decision or transaction; the price at that date; and the date and price at the end of the period or when liquidation was recommended or done, as may have been previously.
Incorrect
According to NFA Rule 2-29, The quality data used by FCMs, IBs, and their associates must include the date of each initial decision or transaction; the price at that date; and the date and price at the end of the period or when liquidation was recommended or done, as may have been previously.
Question 3 of 10
3. Question
What is the minimum time of data history that should be reported in Performance information to be used by the FCMs, IBs, and their associates?
Correct
According to NFA Rule 2-29, The quality data used by FCMs, IBs, and their associates must also be up-to-date, indicating that it must cover at least the most recent 12-month span or include the record as a whole if it is less than 12 months.
Incorrect
According to NFA Rule 2-29, The quality data used by FCMs, IBs, and their associates must also be up-to-date, indicating that it must cover at least the most recent 12-month span or include the record as a whole if it is less than 12 months.
Question 4 of 10
4. Question
What of the following factors should be considered while calculating the performance numbers used in the promotional material:
I. Identify the trades and accounts
II. Describe how and why those transactions and accounts were selected
III. Describe how those transactions and accounts were selected only
IV. Show how representative are the findings
Correct
According to NFA Rule 2-29, The participant or associate must keep records of how the quality figures used in the promotional material are determined. Such documents will classify the trades and accounts used in quality measurement, explain how and why such transactions and accounts are chosen, and demonstrate how the results reflect all reasonably comparable accounts.
Incorrect
According to NFA Rule 2-29, The participant or associate must keep records of how the quality figures used in the promotional material are determined. Such documents will classify the trades and accounts used in quality measurement, explain how and why such transactions and accounts are chosen, and demonstrate how the results reflect all reasonably comparable accounts.
Question 5 of 10
5. Question
What factors must be kept in mind of a person who is authorized to approve the promotional material?
Correct
As per NFA Rule 2-29, A person approved to approve the promotional material must decide that the data about the results are correct and portrayed in a way that is not deceptive.
Incorrect
As per NFA Rule 2-29, A person approved to approve the promotional material must decide that the data about the results are correct and portrayed in a way that is not deceptive.
Question 6 of 10
6. Question
Which of the following standards that should be met in discussing projecting performance of promotional material:
I. All related expenses, including commissions and charges, must be calculated for the expected results
II. The output predicted should not have a reasonable basis
III. It may not be clear what material assumptions are made in predicting output
IV. The risks must be discussed
Correct
According to NFA Rule 2-29, Promotional material that discusses projected performance must also meet several standards that includes:
(A) The promotional material must be reported, and all related expenses must be calculated for the expected results.
(B) The projected performance must have a reasonable basis.
(C) All material assumptions in the quality of the project must be identified.
(D) The risks must be discussed and balanced with the discussion of projected profits.
Incorrect
According to NFA Rule 2-29, Promotional material that discusses projected performance must also meet several standards that includes:
(A) The promotional material must be reported, and all related expenses must be calculated for the expected results.
(B) The projected performance must have a reasonable basis.
(C) All material assumptions in the quality of the project must be identified.
(D) The risks must be discussed and balanced with the discussion of projected profits.
Question 7 of 10
7. Question
What is the necessary condition required for the calculation of Annual rates of return in any promotional material?
Correct
According to NFA Rule 2-29, Annual return rates may not be used in any promotional material unless they are based on actual results for 12 consecutive months and must be regularly measured.
Incorrect
According to NFA Rule 2-29, Annual return rates may not be used in any promotional material unless they are based on actual results for 12 consecutive months and must be regularly measured.
Question 8 of 10
8. Question
What are the conflicts that can be disclosed in the promotional material depending on the scenario?
Correct
According to NFA Rule 2-29, The promotional material must disclose any of the following conflicts, if applicable:
(A) The Member and/or its officers or partners have their options, rights or warrants to purchase any of the issuer's securities
underlying the recommended security futures product, unless the owner is nominal
(B) The Member has been director or co-manager of a public offering of any securities of the issuer whose securities underlie the suggested
items of security futures within the last three years.
Incorrect
According to NFA Rule 2-29, The promotional material must disclose any of the following conflicts, if applicable:
(A) The Member and/or its officers or partners have their options, rights or warrants to purchase any of the issuer's securities
underlying the recommended security futures product, unless the owner is nominal
(B) The Member has been director or co-manager of a public offering of any securities of the issuer whose securities underlie the suggested
items of security futures within the last three years.
Question 9 of 10
9. Question
What basic factors must the promotional material disclose?
Correct
According to NFA Rule 2-29, The promotional material must disclose all relevant costs, including commissions and fees.
Incorrect
According to NFA Rule 2-29, The promotional material must disclose all relevant costs, including commissions and fees.
Question 10 of 10
10. Question
What is the role played by a Floor Broker(FB)?
Correct
An FB is an individual who purchases or sells any futures contracts, options on futures or swaps on any contract market for any other person.
Incorrect
An FB is an individual who purchases or sells any futures contracts, options on futures or swaps on any contract market for any other person.
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