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Question 1 of 10
1. Question
What are the roles of the Division of Enforcement under the Commodity Futures Trading Commission?
Correct
Under the Commodity Futures Trading Commission (CFTC), the Division of Enforcement is the one who investigates the violations from Commission regulations. They also prosecute alleged violations of the Commodity Exchange Act, which is also known as CEA or Act. The activities under management and direction of the Office of the Director are undertaken by the Division.
Incorrect
Under the Commodity Futures Trading Commission (CFTC), the Division of Enforcement is the one who investigates the violations from Commission regulations. They also prosecute alleged violations of the Commodity Exchange Act, which is also known as CEA or Act. The activities under management and direction of the Office of the Director are undertaken by the Division.
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Question 2 of 10
2. Question
Which of the following situations does the Division bring enforcement actions against it?
I. When firms use manipulative or deceptive schemes in connection with commodities, futures, or swaps
II. When firms allocated the operating costs to capital and financial costs
III. When firms improperly market futures and options on designated domestic exchanges
IV. When firms engage with disruptive trading practicesCorrect
The Division of Enforcement brings action against individuals or firms who use manipulative or deceptive schemes in connection with commodities, futures, or swaps. They also bring actions against firms engaged with disruptive trading practices, and improper market futures and options on designated domestic exchanges. The Division of Enforcement undertakes these activities through the direction of the Office of the Director.
Incorrect
The Division of Enforcement brings action against individuals or firms who use manipulative or deceptive schemes in connection with commodities, futures, or swaps. They also bring actions against firms engaged with disruptive trading practices, and improper market futures and options on designated domestic exchanges. The Division of Enforcement undertakes these activities through the direction of the Office of the Director.
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Question 3 of 10
3. Question
What are the administrative sanctions to be recommended by the Division of Enforcement under Commodity Futures Trading Commission?
I. To impose civil monetary penalties
II. To suspend or deny registration and exchange trading privileges
III. To give 3-day allowance in changing the misstatements which caused a violation
IV. To order restitutionCorrect
To impose civil monetary penalties, suspend or deny registration and exchange trading privileges, and to order restitution are the sanctions to be recommended by the Division. This is under the notice of the Office of Director of Commodity Futures Trading Commission. Temporary restraining orders may also be imposed as well as permanent injunctions in Federal court.
Incorrect
To impose civil monetary penalties, suspend or deny registration and exchange trading privileges, and to order restitution are the sanctions to be recommended by the Division. This is under the notice of the Office of Director of Commodity Futures Trading Commission. Temporary restraining orders may also be imposed as well as permanent injunctions in Federal court.
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Question 4 of 10
4. Question
What are the required considerations in determining whether to exempt foreign exchange swaps and forwards from the definition of the term “swap”?
I. If the foreign exchange swaps and forwards are already subject to a regulatory scheme
II. The extent which bank regulators of participants in the market provide adequate supervision
III. The extent of adequate payment and settlement systems
IV. If the foreign exchange swaps and forwards were updated from the previous exchange ratesCorrect
Certain considerations in exempting foreign exchange swaps and forwards from the term “swap” shall be done by the Secretary of the Treasury. They shall consider whether the foreign exchange swaps and forwards are already subject to a regulatory scheme. They shall also consider the extent of adequate payment and settlement systems, as well as adequate supervision including capital and margin requirements.
Incorrect
Certain considerations in exempting foreign exchange swaps and forwards from the term “swap” shall be done by the Secretary of the Treasury. They shall consider whether the foreign exchange swaps and forwards are already subject to a regulatory scheme. They shall also consider the extent of adequate payment and settlement systems, as well as adequate supervision including capital and margin requirements.
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Question 5 of 10
5. Question
Once the Secretary makes a determination to exempt foreign exchange swaps and foreign exchange forwards from the definition of the term “swap”, what shall be submitted to the committees of Congress?
Correct
The Secretary shall submit to the committees of Congress an identification of the objective differences of foreign exchange swaps and forwards only if the Secretary determines its exemption from the definition of the term “swap”. They shall also submit the explanation of why the foreign exchange swaps and forwards are qualitatively different from other classes of swaps.
Incorrect
The Secretary shall submit to the committees of Congress an identification of the objective differences of foreign exchange swaps and forwards only if the Secretary determines its exemption from the definition of the term “swap”. They shall also submit the explanation of why the foreign exchange swaps and forwards are qualitatively different from other classes of swaps.
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Question 6 of 10
6. Question
Where shall foreign exchange swaps and foreign exchange forwards not be exempted as per determination by the Secretary?
Correct
It is stated in the Commodity Exchange Act that foreign exchange swaps and foreign exchange forwards shall not be exempted in any anti-fraud and anti-manipulation provisions as per the determination of the Secretary. The determination of the Secretary includes systematic risk, low transparency, and threats to the financial stability of the United States.
Incorrect
It is stated in the Commodity Exchange Act that foreign exchange swaps and foreign exchange forwards shall not be exempted in any anti-fraud and anti-manipulation provisions as per the determination of the Secretary. The determination of the Secretary includes systematic risk, low transparency, and threats to the financial stability of the United States.
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Question 7 of 10
7. Question
Which of the following is correct regarding the liability of a principal for the act of agent under the Commodity Exchange Act?
Correct
The act, omission, or failure of an individual, association, partnership, corporation, or trust is treated as deemed if within the scope of his employment or office. These include officials, agents, or other persons. This is under the liability of a principal for the act of an agent of Jurisdiction of the Commission of the CEA.
Incorrect
The act, omission, or failure of an individual, association, partnership, corporation, or trust is treated as deemed if within the scope of his employment or office. These include officials, agents, or other persons. This is under the liability of a principal for the act of an agent of Jurisdiction of the Commission of the CEA.
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Question 8 of 10
8. Question
Which of the following accounts apply to the Jurisdiction of Commission under the Commodity Exchange Act?
I. The jurisdiction with respect to oral statements involving the listing for trading of options
II. The jurisdiction with respect to transactions involving the listing for trading of options
III. The jurisdiction with respect to accounts involving the listing for trading of options
IV. The jurisdiction with respect to agreements involving the listing for trading of optionsCorrect
The jurisdiction with respect to transactions, accounts, and agreements involving the listing for trading of call, put, and other options shall apply the Jurisdiction of Commission under the Commodity Exchange Act. Provided, however, that nothing shall be construed to affect the jurisdiction and authority of the Securities and Exchange Commission regarding put, call, and other options.
Incorrect
The jurisdiction with respect to transactions, accounts, and agreements involving the listing for trading of call, put, and other options shall apply the Jurisdiction of Commission under the Commodity Exchange Act. Provided, however, that nothing shall be construed to affect the jurisdiction and authority of the Securities and Exchange Commission regarding put, call, and other options.
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Question 9 of 10
9. Question
Which of the following are requirements in trading of options on such a contract?
I. It shall not determine a stock index futures contract to reasonably used as a surrogate for trading security.
II. A group or index of securities shall not constitute a narrow-based security index.
III. It shall not cause or be used in the manipulation of the price of any underlying security.
IV. It shall not be readily susceptible to manipulation of the price of such a contract.Correct
Under the Jurisdiction of the Commission of Commodity Exchange Act, trading of options shall not cause or be used in the manipulation of the price of any underlying security. It shall also not be readily susceptible to manipulation of the price in a contract. It is also provided that a group or index of securities shall not constitute a narrow-based security index. This group or index includes the underlying security and the option on the security.
Incorrect
Under the Jurisdiction of the Commission of Commodity Exchange Act, trading of options shall not cause or be used in the manipulation of the price of any underlying security. It shall also not be readily susceptible to manipulation of the price in a contract. It is also provided that a group or index of securities shall not constitute a narrow-based security index. This group or index includes the underlying security and the option on the security.
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Question 10 of 10
10. Question
According to the Commodity Exchange Act, which of the following is correct regarding the formation of a Commission?
I. It is composed of five Commissioners.
II. It is composed of seven Commissioners.
III. The Commissioners are appointed by the President.
IV. The Commissioners are appointed by the Appeals Committee.Correct
The Commission is formed with five Commissioners. These Commissioners shall be appointed by the President. Its appointment shall have the advice and consent of the Senate. A Commodity Futures Trading Commission established these terms and composition of Commissioners under the Establishment of Commodity Futures Trading Commission section of the CEA.
Incorrect
The Commission is formed with five Commissioners. These Commissioners shall be appointed by the President. Its appointment shall have the advice and consent of the Senate. A Commodity Futures Trading Commission established these terms and composition of Commissioners under the Establishment of Commodity Futures Trading Commission section of the CEA.