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It is a regulatory requirement for financial advisers to explain any potential additional obligations for clients making a transaction in:
It is a regulatory requirement for financial advisers to explain any potential additional obligations for clients making a transaction in:A . BondsB . CommoditiesC . DerivativesD . EquitiesView AnswerAnswer: C Explanation: Financial advisers are required to explain the additional obligations associated with derivatives, such as margin requirements, leverage risks, and...
Stablecoins are less prone to price fluctuations because:
Stablecoins are less prone to price fluctuations because:A . They do not use blockchain technologyB . Their price is in US DollarsC . Their value is pegged to underlying assetsD . They are highly illiquidView AnswerAnswer: C Explanation: Stablecoin Characteristics: Stablecoins reduce price volatility by pegging their value to stable...
Which index tracking method requires a swap agreement?
Which index tracking method requires a swap agreement?A . Full replicationB . Stratified SamplingC . Synthetic ReplicationD . OptimisationView AnswerAnswer: C Explanation: Synthetic replication involves tracking an index using derivatives such as swaps. A swap agreement allows the fund to replicate the index performance without holding the actual underlying assets,...
If two sets of data have a correlation coefficient of 1.0, they possess:
If two sets of data have a correlation coefficient of 1.0, they possess:A . No correlationB . Weak correlationC . Perfect negative correlationD . Perfect positive correlationView AnswerAnswer: D Explanation: Correlation Coefficient of 1.0: A correlation coefficient measures the strength and direction of the relationship between two datasets. A value...
Offshore foundations are often used as a suitable alternative to which similar type of arrangement?
Offshore foundations are often used as a suitable alternative to which similar type of arrangement?A . Limited liability partnershipsB . Credit unionsC . TrustsD . SICAVsView AnswerAnswer: C Explanation: Offshore foundations are often considered alternatives to trusts, as both are used for wealth structuring, asset protection, and estate planning. However,...
Which of the following underlies the pillars of risk tolerance?
Which of the following underlies the pillars of risk tolerance? A. Psychological traits B. Sociological traits C. Education D. ExperienceView AnswerAnswer: A Explanation: Risk Tolerance Defined Risk tolerance is the degree of variability in investment returns that an investor is willing to withstand. Pillars of Risk Tolerance Psychological Traits: Key...
An economy with two consecutive quarters of negative growth is considered to be in what phase of an economic cycle?
An economy with two consecutive quarters of negative growth is considered to be in what phase of an economic cycle?A . RecessionB . SlumpC . DepressionD . InflationaryView AnswerAnswer: A Explanation: Definition of Recession: A recession is defined as two consecutive quarters of negative GDP growth, indicating a sustained economic...
The concept of the Sharpe ratio is to measure the:
The concept of the Sharpe ratio is to measure the: A. Amount of performance attributable to a benchmark B. Return above a risk-free rate C. Effect the annual charge has on fund performance D. Ability of the fund manager in different scenariosView AnswerAnswer: B Explanation: Sharpe Ratio Defined The Sharpe...
