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Question 1 of 10
1. Question
Which of the following must be summarized for each major investee pool or fund?
I. The reason for allocation of pool assets in each major investee fund and pool
II. The percentage allocation of pool assets invested in each major investee fund and pool
III. The description and nature of each major investee fund and pool
IV. The certain ratio and amount of each major investee fund and poolCorrect
The percentage allocation of pool assets in each major investee fund shall be summarized for each major investee pool or fund. The types of interests traded, material information as to volatility, leverage, and rates of return for each major investee pool or fund shall also be summarized under the description and nature of the investee fund.
Incorrect
The percentage allocation of pool assets in each major investee fund shall be summarized for each major investee pool or fund. The types of interests traded, material information as to volatility, leverage, and rates of return for each major investee pool or fund shall also be summarized under the description and nature of the investee fund.
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Question 2 of 10
2. Question
Which of the following must be addressed on the disclosure document regarding the unique features of virtual currency derivatives?
I. The impact of the changes in foreign exchange rates in the virtual currency
II. The percentage currency which experienced significant price volatility and the initial margin for virtual currency derivatives
III. The restrictions on customer trading activity in virtual currency derivatives
IV. The rules of certain designated contract markets on trading haltsCorrect
Standardized disclosure language for CPOs engaging in virtual currency derivatives is not prescribed by the National Futures Commission. However, the disclosure document must address the percentage value of a particular contract, the restrictions on customer trading activity in virtual currency derivatives, and the rules of certain designated contract markets on trading halts.
Incorrect
Standardized disclosure language for CPOs engaging in virtual currency derivatives is not prescribed by the National Futures Commission. However, the disclosure document must address the percentage value of a particular contract, the restrictions on customer trading activity in virtual currency derivatives, and the rules of certain designated contract markets on trading halts.
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Question 3 of 10
3. Question
Which of the following areas of the pool’s investment must be addressed in the disclosure document?
I. Price volatility
II. Opaque spot market
III. Virtual currencies subsidiaries and associated banks
IV. Unique features of virtual currenciesCorrect
The price volatility, opaque spot market, and unique features of virtual currencies are the areas where the disclosure document is addressed. However, it shall be applicable to the pool’s investments in underlying or spot virtual currency transactions. NFA does not prescribe standardized disclosure language for CPOs.
Incorrect
The price volatility, opaque spot market, and unique features of virtual currencies are the areas where the disclosure document is addressed. However, it shall be applicable to the pool’s investments in underlying or spot virtual currency transactions. NFA does not prescribe standardized disclosure language for CPOs.
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Question 4 of 10
4. Question
Which of the following consists of a disclosure document regarding virtual currency transactions?
I. Credit, liquidity, and leverage risks
II. Valuation and liquidity
III. Cybersecurity
IV. Transaction feesCorrect
Aside from the valuation and liquidity, cybersecurity, and transaction fees, there are other areas where a disclosure document is addressed. These areas are the virtual currency exchanges, intermediaries and custodians, regulatory landscape, technology, and price volatility.
Incorrect
Aside from the valuation and liquidity, cybersecurity, and transaction fees, there are other areas where a disclosure document is addressed. These areas are the virtual currency exchanges, intermediaries and custodians, regulatory landscape, technology, and price volatility.
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Question 5 of 10
5. Question
Which of the following statements are correct regarding the fees and other expenses of the pool?
I. The document must disclose the nature and the amount of the fees and expenses of the pool
II. The document must disclose the increase in the capital as the fees and expenses were recorded
III. The document must explain how the basis of net assets and net profits are calculated
IV. The document must specify how the increase in the value of the pool has been calculatedCorrect
If the fee is determined by reference to a base amount including net assets, the document must explain how the base amount is calculated. If the fee is based on an increase in the value of the pool, the document must specify how the increase is calculated and its time period. If the fee has been paid or is to be paid by another person, the document must disclose the nature and the amount of the fee.
Incorrect
If the fee is determined by reference to a base amount including net assets, the document must explain how the base amount is calculated. If the fee is based on an increase in the value of the pool, the document must specify how the increase is calculated and its time period. If the fee has been paid or is to be paid by another person, the document must disclose the nature and the amount of the fee.
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Question 6 of 10
6. Question
Which of the following statements are correct regarding the break-even point analysis?
I. The calculation of the pool’s break-even point shall be presented in a graph
II. The calculation of the pool’s break-even point shall be in a tabular presentation
III. The break-even point of the pool must be expressed in any legal tenders depending on the location of the trade
IV. The break-even point of the pool must be expressed in a dollar amount onlyCorrect
The break-even point in a disclosure document shall be expressed in a dollar amount and a percentage of the minimum unit of the initial investment. The analysis of the break-even point shall be presented in a tabular form including the calculation or the amount of trading income required for the pool’s net asset value.
Incorrect
The break-even point in a disclosure document shall be expressed in a dollar amount and a percentage of the minimum unit of the initial investment. The analysis of the break-even point shall be presented in a tabular form including the calculation or the amount of trading income required for the pool’s net asset value.
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Question 7 of 10
7. Question
Which of the following statements is correct regarding the significant price volatility and initial margin for virtual currency derivatives?
Correct
If the price of the contract rises, it means that the margin requirements for long positions may increase. Virtual currency derivatives may experience significant price volatility. The initial margin for the virtual currency may also set its value as a percentage of a particular contract.
Incorrect
If the price of the contract rises, it means that the margin requirements for long positions may increase. Virtual currency derivatives may experience significant price volatility. The initial margin for the virtual currency may also set its value as a percentage of a particular contract.
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Question 8 of 10
8. Question
Which of the following disclosures shall be presented in a document?
Correct
In making trading decisions for the pool, the CPO to participate for five years preceding the date of the document shall be disclosed. This also includes a person who will supervise the trading decisions for the pool. The name of the CPO shall be disclosed because the business background of each major investee pool is significant.
Incorrect
In making trading decisions for the pool, the CPO to participate for five years preceding the date of the document shall be disclosed. This also includes a person who will supervise the trading decisions for the pool. The name of the CPO shall be disclosed because the business background of each major investee pool is significant.
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Question 9 of 10
9. Question
Which of the following statements is correct if the pool is organized as a series pool?
Correct
The basis of the major CTA will be 10% or more of the allocation of the series’ assets provided that the pool is organized as a series pool. A summary description of the respective pool asset’s percentage, a description of the nature and operation of the trading programs, and the historical experience of the CTA shall also be disclosed in the document.
Incorrect
The basis of the major CTA will be 10% or more of the allocation of the series’ assets provided that the pool is organized as a series pool. A summary description of the respective pool asset’s percentage, a description of the nature and operation of the trading programs, and the historical experience of the CTA shall also be disclosed in the document.
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Question 10 of 10
10. Question
Which of the following is required to be disclosed in a document regarding the inception of trading?
Correct
Under the inception of trading, the maximum and the minimum subscriptions that will be necessary for the pool to commence trading shall be disclosed in a document. The document must state where the CPO will deposit funds prior to the commencement of trading and to whom the income received will be paid.
Incorrect
Under the inception of trading, the maximum and the minimum subscriptions that will be necessary for the pool to commence trading shall be disclosed in a document. The document must state where the CPO will deposit funds prior to the commencement of trading and to whom the income received will be paid.