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Question 1 of 10
1. Question
Which of the following are part of Individual Registrations?
I. Swap Dealer (SD)
II. Retail Foreign Exchange Dealer (RFED)
III. Associated Person
IV. Floor Trader (FT)Correct
Associated Person and Floor Trader (FT) are individuals that are part of Individual Registration that solicits orders or funds and future contracts while Retail Foreign Exchange Dealer (RFED) and Swap Dealer (SD) are organizations that are part of Firm Registration that acts as a counter-party or dealer in swaps.
Incorrect
Associated Person and Floor Trader (FT) are individuals that are part of Individual Registration that solicits orders or funds and future contracts while Retail Foreign Exchange Dealer (RFED) and Swap Dealer (SD) are organizations that are part of Firm Registration that acts as a counter-party or dealer in swaps.
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Question 2 of 10
2. Question
Which of the following are part of Firm Registrations?
I. Commodity Pool Operator (CPO)
II. Floor Broker (FB)
III. Floor Trader (FT)
IV. Futures Commission Merchant (FCM)Correct
Commodity Pool Operator (CPO) and Futures Commission Merchant (FCM) are part of firm registrations that solicits or receives orders while Floor Broker (FB) and Floor Trader (FT) are part of Individual Registrations that purchases or vends any future contracts.
Incorrect
Commodity Pool Operator (CPO) and Futures Commission Merchant (FCM) are part of firm registrations that solicits or receives orders while Floor Broker (FB) and Floor Trader (FT) are part of Individual Registrations that purchases or vends any future contracts.
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Question 3 of 10
3. Question
Which of the following must meet proficiency requirements before engaging in security futures activities requiring registration as an associated person for those firms?
I. Current Futures Registrants
II. Current NFA Members and Associates
III. Associate of Registered Commodity Trading Advisors
IV. Commodity Pool OperatorsCorrect
The following are under the Security Futures Training. Current Futures Registrants may or may not offer or sell but must meet a certain proficiency requirement while Current NFA members and Associates will have to undergo a training program to satisfy these proficiency requirements.
Incorrect
The following are under the Security Futures Training. Current Futures Registrants may or may not offer or sell but must meet a certain proficiency requirement while Current NFA members and Associates will have to undergo a training program to satisfy these proficiency requirements.
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Question 4 of 10
4. Question
Which of the following are commodity features?
I. Securities and Exchange Commission
II. Futures Commission Merchant
III. Commodity Futures Trading Commission
IV. National Futures AssociationCorrect
SEC, CFTC, and NFA are commodity features. SEC gets an outline about the commodity features from the federal securities regulator, CFTC is the federal regulator and NFA non-governmental regulator. They have websites that provide information about commodity features and additional information that can be used by investors.
Incorrect
SEC, CFTC, and NFA are commodity features. SEC gets an outline about the commodity features from the federal securities regulator, CFTC is the federal regulator and NFA non-governmental regulator. They have websites that provide information about commodity features and additional information that can be used by investors.
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Question 5 of 10
5. Question
Which of the following shall be consulted by the Commodity Futures Trading Commission regarding the administration of the predominance test?
I. The petition filed for review of the hybrid instrument
II. The nature of the hybrid instrument
III. The history, purpose, extent, and appropriateness of the hybrid instrument
IV. The record of the petition transmitted by the clerk of the courtCorrect
The Commodity Futures Trading Commission shall consult the nature, history, purpose, extent, and appropriateness of the hybrid instrument before commencing a rulemaking or making a determination. It shall also seek the concurrence of the Board of Governors of the Federal Reserve System consisting of the abovementioned statements.
Incorrect
The Commodity Futures Trading Commission shall consult the nature, history, purpose, extent, and appropriateness of the hybrid instrument before commencing a rulemaking or making a determination. It shall also seek the concurrence of the Board of Governors of the Federal Reserve System consisting of the abovementioned statements.
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Question 6 of 10
6. Question
How are the hybrid instruments predominantly be considered a banking product?
I. If the holder of the hybrid instrument is required to make any arrangements and payments in addition to the purchase price
II. If the issuer of the hybrid instrument received payment in full with its delivery
III. If the purchaser of the hybrid instrument is not required to make under the terms of the instrument
IV. If the issuer of the hybrid instrument is not subject by the mark-to-market margin requirementsCorrect
Using the predominance test, a hybrid instrument may be considered predominantly a banking product if the issuer of the hybrid instrument received payment in full together with its delivery. It is also a factor if the purchaser of the instrument is not required to make any arrangements and payments in addition to the purchase price. It shall also not be subject by the mark-to-market margin requirements to be considered predominantly a banking product.
Incorrect
Using the predominance test, a hybrid instrument may be considered predominantly a banking product if the issuer of the hybrid instrument received payment in full together with its delivery. It is also a factor if the purchaser of the instrument is not required to make any arrangements and payments in addition to the purchase price. It shall also not be subject by the mark-to-market margin requirements to be considered predominantly a banking product.
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Question 7 of 10
7. Question
What shall be the result in a predominance test if the hybrid instrument is not marketed as a contract of sale of a commodity for future delivery?
Correct
A hybrid instrument is considered to be predominantly a banking product if such instruments are not marketed as a contract of sale of a commodity for future delivery. This predominance test is under the Commodity Exchange Act. It may also be considered to be predominantly a banking product if it is not required to add settlement payments to the purchase price.
Incorrect
A hybrid instrument is considered to be predominantly a banking product if such instruments are not marketed as a contract of sale of a commodity for future delivery. This predominance test is under the Commodity Exchange Act. It may also be considered to be predominantly a banking product if it is not required to add settlement payments to the purchase price.
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Question 8 of 10
8. Question
Which of the following shall not be included in the mark-to-market margining requirements specified in the Commodity Exchange Act?
Correct
In mark-to-market margining requirements, the obligation of an issuer to increase the amount of collateral for the benefit of the purchaser shall not be included. This collateral is held in the pledge which gives benefit to the purchaser of the security debt instrument if it was increased.
Incorrect
In mark-to-market margining requirements, the obligation of an issuer to increase the amount of collateral for the benefit of the purchaser shall not be included. This collateral is held in the pledge which gives benefit to the purchaser of the security debt instrument if it was increased.
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Question 9 of 10
9. Question
Which of the following are retail commodity transactions which apply any agreements and contract under the Commodity Exchange Act?
I. Transactions entered with a person that is not an eligible contract participant
II. Transactions entered with a person which is not an eligible commercial entity
III. Transactions entered on a leveraged or margined basis
IV. Transactions entered on a different basis other than leverage and marginCorrect
Retail commodity transactions are transactions entered into a person that is not an eligible commercial entity. These are also transactions entered on a leveraged or margined basis. The agreements and contracts in the Commodity Exchange Act are applied to these transactions as retail commodity transactions.
Incorrect
Retail commodity transactions are transactions entered into a person that is not an eligible commercial entity. These are also transactions entered on a leveraged or margined basis. The agreements and contracts in the Commodity Exchange Act are applied to these transactions as retail commodity transactions.
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Question 10 of 10
10. Question
Which of the following refers to a “board of trade”?
Correct
The board of trade refers to organized exchange or other trading facilities. Its purpose is to encourage the establishment in manufacturing, promoting trade, securing or improving shipping facilities, and furthering its commercial interests. It is designated by the Commission as a contract market for any transactions.
Incorrect
The board of trade refers to organized exchange or other trading facilities. Its purpose is to encourage the establishment in manufacturing, promoting trade, securing or improving shipping facilities, and furthering its commercial interests. It is designated by the Commission as a contract market for any transactions.