MCQ Chapter 4 Flashcards
What is an ECN?
An electronics Communication Network. It enables investors to deal amongst themselves and not go through an exchange
What is the name of the method used by many ‘execution only’ stock brokers that serve the private investor, where for each trade there will be a set fee no matter how large or small the value of the trade?
Question 6Select one:
a. Flat fee
b. Percentage
c. Basis points
d. Per unit
Flat fee
At what transaction value is the PTM Levy imposed on investors?
Question 8Select one:
a. Any transaction over £1,000.
b. Any transaction over £5,000.
c. Any transaction over £10,000.
d. Any transaction over £20,000.
Any transaction over £10,000.
According to MiFID II, how often must sell-side firms review the effectiveness of their execution arrangements and venue selection?
Select one:
a. Only when there is a significant market event or disruption.
b. At least yearly, to identify and correct any deficiencies.
c. Every five years, in alignment with regulatory audit cycles.
d. Bi-annually, unless there are no identified issues with execution.
At least yearly, to identify and correct any deficiencies
What is stamp duty
A one time tax on purchasing of assets/documents, usually houses/mortgages. Used to fight france
What is DMA?
Direct Market Access.
Acts as a counterparty to both sides of the transaction, this process is called novation
What is MTM
Mark-to-Market. Where assets are marked or recorded at their current value
Which statement accurately reflects the relationship between Direct Market Access (DMA) and clearinghouses?
Question 16Select one:
a. DMA eliminates the need for clearinghouses in the settlement process.
b. Clearinghouses facilitate the DMA by providing platforms for direct trading.
c. DMA allows traders to execute trades, while clearinghouses ensure these trades are settled properly.
d. DMA and clearinghouses serve the same purpose in financial markets.
DMA allows traders to execute trades, while clearinghouses ensure these trades are settled properly.
