FX Industry Knowledge Quiz

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Email *

First name *

Last name *

What does LEI stand for? *

5 points

Licensed entity identifier

Legal entity identifier

Legal enterprise identifier

Other:

Who regulates financial markets in the UK? *

5 points

BaFin

ESMA

FCA

ECB

Other:

What does "matched principal" license permission mean for FCA-licensed entity? *

5 points

Broker can deploy hybrid model.

Broker can only take professional clients.

Broker can deploy only agency model.

Broker can deploy only market making model.

Broker can only take ECP clients.

Other:

Equate the following definitions of brokerage business models: *

12 points

Agency

Principal

Market maker

B book

A book

STP

NDD

Bucket shop

What is the leverage restriction for retail traders imposed by Korean FSS? *

5 points

Option 1

Unlimited

1:5

1:10

1:20

1:100

Other:

Aggregator is just another word for ECN. *

5 points

True

False

Appropriateness test under MiFID2 is a *

5 points

test that determines eligibility of the customer to open an account at a brokerage firm.

test that determines eligibility of the customer to be categorized as professional account at a brokerage firm.

test that determines eligibility of the customer to be categorized as retail account at a brokerage firm.

When a client places a trade for 1 lot of EURUSD, and AM has 1 point markup, what is the value of that markup in USD (EURUSD is 1.2200)? *

5 points

1.22 USD

10 USD

1 USD

12.2 USD

Other:

What is the USD notional value of 1 lot of XAUUSD transaction? (XAUUSD=1325.50) *

5 points

132.440 USD

100 USD

100,000 USD

132,550 USD

What does the Sharpe Ratio measure? *

5 points

Risk-adjusted return

Used margin to return

Risk-free return

Volatility to return

MT5 is a SaaS based platform. *

5 points

True

False

Other:

If Time in Force = GTC, *

5 points

an order will continue to work until the order fills or is cancelled.

if volume available at the top of the book is not sufficient to fill entire order, the trade will be cancelled.

trade will be filled for whatever volume is available at the top of the book, remainder will be cancelled.

Select jurisdictions that differentiate between STP and Market making licenses: *

10 points

Cyprus

JFSA

Australia

United States

Required

Define Latencies between major financial centers: *

15 points

224 ms

70 ms

260 ms

NY4 to HK3

LD4 to HK3

NY4 to LD4

Select provision(s) that are included in MiFID2: *

10 points

LEI number reporting for entities trading with EU licensed counterparties.

Best execution - Firms required to conduct due diligence on counterparties and look beyond spreads and pricing.

HFT traders must be reported to the regulators.

Firms are required to disclose cost of trading details to the clients upon request.

Firms are required to have at least 5 counterparties.

Client's country of residence must be included in the reports.

Client's Tax ID must be identified in reports.

Clients need to be mailing their documents via postal service to apply for an account with an EU broker.

Other:

Required

Calculate VWAP price for 5 million order BUY on EURUSD when market depth looks as following: *

15 points

1.23178

1.231775

1.231772

1.23177

1.231776

Other:

Calculate commission for 200 lots EURUSD trade if commission rate is $12 per million USD notional commission (EURUSD rate is 1.27). *

10 points

$24

$12

$1,200

$304.8

$3,024

$2,400

$240

$302.4

Other:

Select publicly traded companies only from the list below: *

10 points

Gain Capital

AxiCorp

Plus500

CMC

Interactive Brokers

FXPro

Pepperstone

Alpari

Invast

Other:

Required

How can a company obtain LEI number? *

10 points

Company needs to register with any LOU.

Company needs to register with appropriate LOU available in their place of registration.

Company needs to register with appropriate LOU available in their place of operation.

Company needs to register with any LOU that supports jurisdiction of their registration.

Other:

Client's monthly minimum is 2,000 USD, client traded 1,500 lots of EURUSD in March 2018. What is client's monthly charge for liquidity? (Trading commission is 12$ usd per million USD notional per side, EURUSD is 1.26) *

15 points

2,000 USD

$2,268 USD

200 USD

No charge

1,800 USD

Other:

Select documents that will NOT be accepted by broker's compliance as a proof of address: *

10 points

Certificate of Incumbency

Invoice from a vendor to the company

Bank statement

Phone bill for the company

DHL receipt from a delivery made to a company address

Lease agreement for the company headquarters

Certificate of Incorporation

Other:

Required

How is Liquidation Level calculated in MT4? *

10 points

Used Margin/Equity*100%

Equity/Used Margin*100%

Balance/Used Margin*100%

Equity/Free Margin*100%

Floating P&L/Used Margin*100%

Free Margin/Equity*100%

Other:

Calculate notional USD value for 100 contracts of DAX (GER30) trading at 12291.50 (EURUSD at 1.26). *

10 points

What does VAR stand for in finance? *

10 points

What regulatory body governs financial markets in Switzerland? *

10 points

SMA

SFC

SFCA

FINMA

BAFIN

SFSA

SFS

RTS 27 Report should be published by financial firms in the EU *

5 points

Monthly

Annually

Quarterly

RTS 28 Report published by the EU-licensed investment firms requires firms to report on: *

10 points

Quality of execution

Top 5 execution venues in terms of trading volume where investment firm executed its client orders in preceding year

Report detailing transaction costs incurred by investment firms

Top 10 trading instruments by volume executed in preceding year

Other:

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