CH2. Market Participants

Question 1

The type of Trading Participant who buys and sells securities for account of others/public is known as:
(a) Dealing Participant
(b) Broker Participant
(c) Trading Participant
(d) Qualified Investor
(e) All of the above

Answer 1

(b) Broker Participant

Question 2

The following are Trading Participants, Except:
(a) Qualified Investors
(b) Salesman
(c) Broker Participant
(d) Dealing Participant
(e) None of the above

Answer 2

(b) Salesman

Question 3

The following are Qualified Investor Participants, Except:
(a) Banks
(b) Insurance Company
(c) Investment Company
(d) An entity with total assets of more than php 1,000,000
(e) An entity with total assets of more than php 1,200,000

Answer 3

(d) An entity with total assets of more than php 1,000,000

Question 4

a client wishes to put an order with the intention of having his/her total order matched at his indicated price and withdrawn when the whole amount can not be matched, he/she should put:
(a) Iceberg Order
(b) Fill and Kill Order
(c) Limit Order
(d) Fill or Kill Order
(e) None of the above

Answer 4

(d) Fill or Kill Order

Question 5

The following information are contained in the order ticket prepared by the Brokering Participant, except:
(a) Name of customer
(b) Price at which order was executed
(c) Whether order was solicited or unsolicited
(d) Name of the salesman
(e) All of the above

Answer 5

(e) All of the above

Question 6

How long should Broker Participants keep records of Customer orders?
(a) 10 years
(b) 7 years
(c) 5 years
(d) 3 years
(e) 1 year

Answer 6

(c) 5 years

Question 7

The Trading participant must register the following personnel with the Philippine Dealing Exchange (PDEX) as “registered personnel”, except:
(a) Salesmen
(b) Treasurer
(c) Traders
(d) Associated Persons
(e) Counterparty limit officer

Answer 7

(e) Counterparty limit officer

Question 8

Customer accounts are protected when the registration of a Trading Participant is suspended or revoked because:
(a) the owners of the Trading Participant will honor its obligations to it’s customers.
(b) the investments of the customers are protected by insurance from business failures of the trading participants
(c) the Securities & Exchange Commission requires the Trading Participants to put up margins against customer transactions
(d) the outstanding contracts of the customers will be taken over by another trading participant
(e) None of the above

Answer 8

(e) None of the above

Question 9

Which of the following statements are true?
I. Brokering Participants can only trade for clients
II. Dealing Participants can trade for clients and Firm’s
account
III. Brokering Participants can trade for clients and Firm’s
account
IV. Dealing Participants can only trade for their own account
V. Deals are entered into separate terminals, customer
transaction in the broker terminals and firm’s account into the dealing terminals
(a) I,IIandV
(b) II, III and V
(c) II and III
(d) I,IVandV
(e) IandII

Answer 9

(d) I,IVandV

Question 10

Which of the following statements is true?
(a) a qualified investor can directly buy or sell securities in the OTC market from non qualified investors
(b) a non qualified investor can also deal directly in the OTC market
(c) a non qualified investor can only participate in the OTC market by dealing through a broker
(d) a non qualified investor can deal directly with a qualified investors in the OTC market
(e) none of the above

Answer 10

(c) a non qualified investor can only participate in the OTC market by dealing through a broker