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Question 1 of 10
1. Question
What is an agreement when buying or selling a specific quantity of a commodity at a specified price on a particular date in the future?
Correct
Commodity Futures Contracts is the agreement when buying or selling a specific quantity of the commodity. Some tangible and intangible products may be considered a commodity. These include oil, metals, animal products, grains, also financial instruments, and currencies.
Incorrect
Commodity Futures Contracts is the agreement when buying or selling a specific quantity of the commodity. Some tangible and intangible products may be considered a commodity. These include oil, metals, animal products, grains, also financial instruments, and currencies.
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Question 2 of 10
2. Question
Who are the people that must be NFA members who manage and exercises discretion over customer accounts?
Correct
The National Futures Association consists of members with different roles. Commodity Trading Advisors (CTAs) must be NFA members in managing and exercising discretion over the customer accounts. Their role is to directly or indirectly advise others about the advisability of trading futures contracts, specific opinions on futures, and swaps.
Incorrect
The National Futures Association consists of members with different roles. Commodity Trading Advisors (CTAs) must be NFA members in managing and exercising discretion over the customer accounts. Their role is to directly or indirectly advise others about the advisability of trading futures contracts, specific opinions on futures, and swaps.
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Question 3 of 10
3. Question
Which of the following conduct that may violate Compliance Rule 2-4?
I. Misusing sensitive personal information
II. Disclosing customer orders prior to execution
III. Attempting to obtain information disclosing a CTA’s historical trading positions without CTA’s permission
IV. Observing high standards of commercial honor and just and equitable principles of tradeCorrect
The abovementioned statements are just some examples of conduct that may possibly harm future customers. Any member or associates that obtain confidential information of another member or associates without that person’s permission or misuse trade secrets violates Compliance Rule 2-4.
Incorrect
The abovementioned statements are just some examples of conduct that may possibly harm future customers. Any member or associates that obtain confidential information of another member or associates without that person’s permission or misuse trade secrets violates Compliance Rule 2-4.
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Question 4 of 10
4. Question
Which of the following are the requirements needed to become a registered Commodity Trading Advisor and an NFA member?
I. Complete Online Form 7-R
II. Pay a non-refundable application fee of $200
III. Submit fingerprint cards
IV. Complete online Annual QuestionnaireCorrect
The following are the requirements needed when registering as a CTA and an NFA member. Other requirements needed are in order to have safe access to NFA ORS they must designate a Security Manager, if applicable, online NFA membership must be completed, and lastly, non-refundable CTA membership dues must be paid.
Incorrect
The following are the requirements needed when registering as a CTA and an NFA member. Other requirements needed are in order to have safe access to NFA ORS they must designate a Security Manager, if applicable, online NFA membership must be completed, and lastly, non-refundable CTA membership dues must be paid.
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Question 5 of 10
5. Question
Which of the following requirements must be filed by a Commodity Trading Advisor (CTA) for its principals and associated persons?
I. Satisfy proficiency requirements for each sole proprietor, AP, and forex AP; effective January 31, 2020, swap APs will be required to complete NFA’s Swaps Proficiency Requirements by the compliance date of January 31, 2021.
II. Pay non-refundable CTA membership dues
III. Complete online Annual Questionnaire
IV. Fingerprint cardsCorrect
This is one of the requirements that need to be filed by a CTA for its principals and associated persons. Other needed requirements are fingerprint cards must be submitted, and for each principal or associated person, online Form 8-R must be completed and a non-refundable application fee of $85 must be paid.
Incorrect
This is one of the requirements that need to be filed by a CTA for its principals and associated persons. Other needed requirements are fingerprint cards must be submitted, and for each principal or associated person, online Form 8-R must be completed and a non-refundable application fee of $85 must be paid.
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Question 6 of 10
6. Question
In Introducing Broker registration, the IB is required to register. Who among the following may be exempted from this registration?
I. Is a non-U.S. resident or firm with only U.S. customers and the firm submits all trades for clearing to an FCM
II. Registered as a Commodity Trading Advisor (CTA) and either solely manages accounts under powers of attorney or doesn’t receive per-trade compensation
III. Observing high standards of commercial honor and just and equitable principles of trade
IV. Disclosing customer orders prior to executionCorrect
All Introducing Brokers must be NFA members. An Introducing Broker is required for an IB registration, but additional information, an individual may be exempted unless that individual or organization is a registered as and acting in the capacity of an Associated Person (AP), and registered as a Futures Commission Merchant (FCM) or Commodity Pool Operator (CPO).
Incorrect
All Introducing Brokers must be NFA members. An Introducing Broker is required for an IB registration, but additional information, an individual may be exempted unless that individual or organization is a registered as and acting in the capacity of an Associated Person (AP), and registered as a Futures Commission Merchant (FCM) or Commodity Pool Operator (CPO).
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Question 7 of 10
7. Question
What term describes the banking product offered by a bank, having one or more payments to the level or rate of delivery of one or more commodities?
Correct
If one or more payments have been made in one or more commodities, it is a banking product considered as a hybrid instrument. This may be used in a predominance test where it can be identified if it is predominantly a banking product or not. Its payments are indexed to the value, level, or rate of the delivery of the commodities.
Incorrect
If one or more payments have been made in one or more commodities, it is a banking product considered as a hybrid instrument. This may be used in a predominance test where it can be identified if it is predominantly a banking product or not. Its payments are indexed to the value, level, or rate of the delivery of the commodities.
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Question 8 of 10
8. Question
At which agency shall the Commission cooperate with investigating the market with its unnecessary duplication of information-gathering servie?
Correct
To avoid unnecessary duplication of information-gathering activities, the Commission shall cooperate with the Department of Agriculture. In cooperating with various deparments, the duplication may be avoided which leads to misstatement, fraud, and error. Other departments or Federal agency which makes market investigations may also be considered.
Incorrect
To avoid unnecessary duplication of information-gathering activities, the Commission shall cooperate with the Department of Agriculture. In cooperating with various deparments, the duplication may be avoided which leads to misstatement, fraud, and error. Other departments or Federal agency which makes market investigations may also be considered.
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Question 9 of 10
9. Question
Which of the following must be investigated regularly by the Commission?
I. The markets of real tangible properties
II. The markets for rights and interests
III. The markets for articles
IV. The markets for goods and servicesCorrect
The markets for goods, articles, services, rights, and interests which are subject to futures contracts shall be investigated by the Commission regularly. These investigations shall include the information supply, demand, and other conditions with respect to such goods, articles, services, rights, and interests.
Incorrect
The markets for goods, articles, services, rights, and interests which are subject to futures contracts shall be investigated by the Commission regularly. These investigations shall include the information supply, demand, and other conditions with respect to such goods, articles, services, rights, and interests.
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Question 10 of 10
10. Question
Which of the following shall not be disclosed by the Commission under the Commodity Exchange Act?
I. Location of the trade
II. Names of customers
III. Market positions
IV. Business transactionsCorrect
The names of customers, market positions, and business transactions shall not be disclosed by any member of the Commission. This would violate the principle of confidentiality. The trade secrets by two parties shall also not be disclosed except if provided in the Commodity Exchange Act.
Incorrect
The names of customers, market positions, and business transactions shall not be disclosed by any member of the Commission. This would violate the principle of confidentiality. The trade secrets by two parties shall also not be disclosed except if provided in the Commodity Exchange Act.