Question 1

Which of the following is true regarding the consummation of a deal?

Options :

A : written confirmations always override terms verbally agreed to

B : verbal agreements are considered binding

C : deals agreed to verbally can be done subject to documentation

D : verbal agreements are never to be considered legally binding

Answer: C

Question 2

How can material divergences between the value of cash and collateral be managed in a documented sell/ buy-back?

Options :

A : Margin maintenance

B : Either of the above, but usually (b)

C : Either of the above, but usually (a)

D : Re-pricing

Answer: B

Question 3

An 'at-the-money' call option:

Options :

A : Costs less than an 'out-of-the-money' call option

B : Costs the same as an 'in-the-money' put option

C : Costs more than an 'in-the-money' call option

D : Costs more than an 'out-of-the-money' call option

Answer: D

Question 4

Dealers are authorized to deal:

Options :

A : anywhere, even away from their own dealing premises

B : after-hours, but only from their private residence

C : after-hours, but only if listed as such by management

D : away from their broker-s dealing premises

Answer: C

Question 5

When an employee executes a personal trade in advance of a client's or institution's order to benefit from the anticipated movement in the market price following the execution of a large trade, it is called:

Options :

A : forward-facing

B : insider dealing

C : front running

D : ex ante trading

Answer: C

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