Series 65: Exercise

Taken from our Series 65 Online Guide

Exercise

Choose the correct option

  1. 1. High-frequency traders generally prefer which of the following?
  2. I. Having computers located in close proximity to an exchange
  3. II. “High latency”
  4. III. Making a few trades in a short amount of time
  5. IV. Short holding periods for securities purchased
  6. A. I and II
  7. B. II and III
  8. C. I and IV
  9. D. IIII and IV

  1. 2. Which of the following is not a characteristic of high-frequency trading?
  2. A. The majority of high-frequency trades are not profitable, but the number of trades that are profitable make high-frequency trading worthwhile.
  3. B. High-frequency trading can exacerbate market anomalies.
  4. C. High-frequency trading provides opportunities for market manipulation.
  5. D. High-frequency trading usually involves many cancelled orders.
  6. 3. Which of the following does low latency not measure?
  7. A. The time it takes for information to reach a trader’s system
  8. B. The time it takes for the algorithms to respond to information
  9. C. The time it takes for a person to initiate an order
  10. D. The time it takes for the order to reach an exchange and be implemented

Answers

  1. 1. C. High-frequency traders are always seeking the best “low-latency

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