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Series 3 6. questions and answers certified 2024
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Series 3 6. questions and answers certified 2024
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Series 3What is a switch order? - correct answer ✔The customer placed a switch
order and switches from one delivery month to another.
Do disclosure documents prepared by CTAs and CPOs must have a table of
contents? - correct answer ✔Yes. Disclosure documents prepared by CTAs
and CPOs must have a table of contents.
How do you offset a client who bought a put? - correct answer ✔To offset a
long put, one sells a put with the same strike price, with the same expiration,
on the same exchange, covering the same commodity.
Who is the first party to review an NFA disciplinary complaint? - correct
answer ✔The NFA Director of compliance.
What is the maximum potential loss for the buyer of a futures option? - correct
answer ✔An option buyer cannot lose more than the premium paid because
the option need not be exercised.
Does a CPO must always disclose the size of the pool to potential investors? -
correct answer ✔A CPO must always disclose the size of the pool to
potential investors.
Who acts as a counter party to a futures transaction? - correct answer
✔Exchanges have arrangements with a clearinghouse that matches and
settles trades with its member firms. A clearinghouse becomes the seller to
every buyer and the buyer to every seller of a cleared futures trade.
,Are COMEX price limits applicable to silver future contracts in the current
delivery month? - correct answer ✔The COMEX enforces no daily price
limits on its contracts such as gold, silver, copper, in the delivery or spot
month.
Are margins for futures trading and future options calculated the same way? -
correct answer ✔Margins for futures contracts and for options are
determined in different ways. For example, the option buyer must pay the
premium in full; in future, the full value is never paid to initiate the position.
Can you appeal arbitration decisions? - correct answer ✔Arbitration
decisions are final and binding; there is no appeal process.
Can industry professionals serve on NFA arbitration panels? - correct answer
✔Yes. Industry professionals can serve on the NFA arbitration panels.
Is a P.O. Box number acceptable submission for a temporary IB registration? -
correct answer ✔No. A P.O. box is not acceptable submission for a
temporary IB registration.
Do APs who are respondents to claims in NFA arbitration must have lawyer
attend arbitration proceedings? - correct answer ✔There is no requirement
that a party to NFA arbitration be represented by an attorney or counsel.
Under NFA Arbitration rules, all parties to dispute have a right to counsel and
representation.
What securities prices are used to determine the cash settlement price for a
security futures contract? - correct answer ✔The S.E.C. and C.F.T.C. require
the cash-settlement price of a security futures contract be based on the
opening price on the business day after the last trading day of the underlying
security.
, Can a voluntary proceeding by C.F.T.C. reparations be appealed? - correct
answer ✔Parties to voluntary reparation proceedings waive their right to
appeal. Formal and summary proceedings carry appeal rights.
When creating a commodity pool, a CPO would disclose all costs in
establishing such a pool. Does the potential size of the pool need not be
disclosed? - correct answer ✔The potential operating size of the pool is
required to be disclosed.
Are written and oral promotional materials subject to Rule 2-29? - correct
answer ✔Yes, written and promotional materials are subject to rule 2-29.
On the N.Y.M. and C.M.E. members must margin? - correct answer ✔On the
N.Y.M. and C.M.E. members must margin their total long and short positions.
For all exchanges other than the New York and Chicago Mercantile
exchanges, what must be margined by the clearing house member firms? -
correct answer ✔All exchanges other than the New York and Chicago
Mercantile exchanges, only net. position must be margined by the
clearinghouse member firms.
Can C.P.O.s commingle monies among pools? - correct answer ✔C.P.O.s
cannot commingle monies among pools. They must separately account for the
funds of each pool.
A thin market in any particular exchange involves? - correct answer ✔A thin
market involves the risk of low liquidity-not enough buyers or sellers to offset
positions.
Is Credit-tightening moves by the Federal Reserve Board and an increasing
balance of trade surplus for the United States is historically bullish for the U.S.
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