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Question 1 of 10
1. Question
Which of the following persons shall not be associated with a commodity trading advisor?
I. Associated persons as a consultant
II. Associated persons as an officer
III. Associated persons as a partner
IV. Associated persons as a trading advisorCorrect
It is an unlawful act for a commodity trading advisor to be associated with persons as a partner, officer, consultant, employee, or agent. This is unlawful in a way it involves the solicitation of a client’s discretionary account or the supervision of persons engaged.
Incorrect
It is an unlawful act for a commodity trading advisor to be associated with persons as a partner, officer, consultant, employee, or agent. This is unlawful in a way it involves the solicitation of a client’s discretionary account or the supervision of persons engaged.
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Question 2 of 10
2. Question
Which of the following is correct regarding the hybrid instruments?
I. No hybrid instrument shall be void based solely on its failure to satisfy the predominance test.
II. No hybrid instrument shall be unenforceable based solely on its failure to satisfy the predominance test.
III. No hybrid instrument shall be entitled to rescind based solely on its failure to satisfy the predominance test.
IV. No hybrid instrument shall be enforceable based solely on its failure to satisfy the predominance test.Correct
A hybrid instrument shall never be void, unenforceable, or be entitled to rescind on the basis of its failure to satisfy the predominance test. This hybrid instrument includes the hybrid instrument under any provision of Federal or State law. It shall comply with the terms or conditions of an exemption or exclusion from any provision.
Incorrect
A hybrid instrument shall never be void, unenforceable, or be entitled to rescind on the basis of its failure to satisfy the predominance test. This hybrid instrument includes the hybrid instrument under any provision of Federal or State law. It shall comply with the terms or conditions of an exemption or exclusion from any provision.
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Question 3 of 10
3. Question
In an individual registration, who is a person or individual that purchases and sells future contracts and swaps any contract market for a person’s own account?
Correct
A Swap Dealer is part of firm registration, its role is a dealer in swaps. A floor broker is a person who buys or sells any futures contracts or swaps any contract to another person. Lastly, an Associated Person is a person who asks orders and customer funds on behalf of a CPO, CTA, FCM, RFED, and IB.
Incorrect
A Swap Dealer is part of firm registration, its role is a dealer in swaps. A floor broker is a person who buys or sells any futures contracts or swaps any contract to another person. Lastly, an Associated Person is a person who asks orders and customer funds on behalf of a CPO, CTA, FCM, RFED, and IB.
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Question 4 of 10
4. Question
Who is an individual that may not offer or sell, or supervise a person who offers or sell, security futures until they have met certain proficiency requirements?
Correct
The current futures registrants, commodity pool operators, associates of registered commodity trading advisors, and the current NFA members and associates all under the instructions for NFA members. Before engaging in security futures activities, the following must meet a specific or a certain proficiency requirement.
Incorrect
The current futures registrants, commodity pool operators, associates of registered commodity trading advisors, and the current NFA members and associates all under the instructions for NFA members. Before engaging in security futures activities, the following must meet a specific or a certain proficiency requirement.
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Question 5 of 10
5. Question
What compliance rule prohibits Members and Associates from knowingly obtaining or seeking to obtain another Member’s or Associate’s confidential information or trade secrets without that person’s permission?
Correct
The rules mentioned above have specific terms and agreements. However, the Compliance Rule 2-4 prohibits members and associates in misusing confidential information. This rule may reach conduct that may harm futures customers but does not seek to control business arguments between members.
Incorrect
The rules mentioned above have specific terms and agreements. However, the Compliance Rule 2-4 prohibits members and associates in misusing confidential information. This rule may reach conduct that may harm futures customers but does not seek to control business arguments between members.
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Question 6 of 10
6. Question
Which of the following is are the exception in prohibiting a hybrid instrument to be regulated as stated in the Commodity Exchange Act?
I. If the Commission determines that it is inconsistent with the Commodity Exchange Act
II. If the Commission determines that the hybrid instrument is not predominant in a predominance test
III. If the Commission determines that the hybrid instrument is predominantly a banking product
IV. If the Commission determines that it is necessary and appropriate in the public interestCorrect
Once the Commission determines that the hybrid instrument is not predominantly a banking product in a predominant test, the Commission may allow its regulation. They may also allow its regulation if the action is necessary and appropriate in the public interest. It shall also be consistent with the purposes of the Commodity Exchange Act.
Incorrect
Once the Commission determines that the hybrid instrument is not predominantly a banking product in a predominant test, the Commission may allow its regulation. They may also allow its regulation if the action is necessary and appropriate in the public interest. It shall also be consistent with the purposes of the Commodity Exchange Act.
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Question 7 of 10
7. Question
In National Futures Association (NFA) Compliance Rule 2-4, who shall observe high standards of commercial honor and just and equitable principles of trade in the conduct of their commodity futures business?
Correct
Under this compliance rule, standards must be observed in commercial honor and just and equitable principles of trade. Members and Associates shall observe high standards especially when it comes to the conduct of their commodity futures business.
Incorrect
Under this compliance rule, standards must be observed in commercial honor and just and equitable principles of trade. Members and Associates shall observe high standards especially when it comes to the conduct of their commodity futures business.
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Question 8 of 10
8. Question
Who are the people that will provide guidance on certain issues to ensure that Members and Associates understand their responsibilities to observe just and equitable principles of trade?
Correct
As a requirement in the National Futures Association, the Board of Directors observes and assures that their Members and Associates understand their responsibilities. They should also act justly and honestly for the best interests of their customers.
Incorrect
As a requirement in the National Futures Association, the Board of Directors observes and assures that their Members and Associates understand their responsibilities. They should also act justly and honestly for the best interests of their customers.
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Question 9 of 10
9. Question
Who is a federal government agency that regulates the commodity futures, commodity options, and swaps trading markets?
Correct
The CFTC or Commodity Futures Trading Commission is a federal government agency and is a federal regulator of commodity features. In relation to the commodity features, the Commission’s website provides alerts, education, and tools which may be useful to the users.
Incorrect
The CFTC or Commodity Futures Trading Commission is a federal government agency and is a federal regulator of commodity features. In relation to the commodity features, the Commission’s website provides alerts, education, and tools which may be useful to the users.
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Question 10 of 10
10. Question
Who is a non-governmental regulator for anyone who trades futures with the public?
Correct
Anyone who trades with the public and gives assistance about futures transactions must be registered in the National Futures Association (NFA). Its website includes information on how to file a complaint, check out a salesperson or firm, and for its investors, it also offers educational resources.
Incorrect
Anyone who trades with the public and gives assistance about futures transactions must be registered in the National Futures Association (NFA). Its website includes information on how to file a complaint, check out a salesperson or firm, and for its investors, it also offers educational resources.