Series 66: Exercise

Taken from our Series 66 Online Guide

Exercise

Answer the following questions.

1. High-frequency traders generally prefer which of the following?

I. Having computers located in close proximity to an exchange

II. High latency

III. Making a few trades in a short amount of time

IV. Short holding periods for securities purchased

A. I and II

B. II and III

C. I and IV

D. III and IV

2. Which of the following is not a characteristic of high-frequency trading?

A. Although most high-frequency trades are not profitable, the profits made by the few that are make high-frequency trading worthwhile.

B. High-frequency trading can exacerbate market anomalies.

C. High-frequency trading provides opportunities for market manipulation.

D. High-frequency trading usually involves many canceled orders.

3. Which of the following does low latency not measure?

A. The time it takes for information to reach a trader’s system.

B. The time it takes for the algorithms to respond to information

C. The time it takes for a person to initiate an ord

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