Chapter 7 Practice Questions
1. Fred is an independent IB operating as a sole proprietor. Which registration form must he file with the National Futures Association?
A. Form 40
B. Form 8-R
C. Form 101
D. Form 1-FR-FCM
2. How much is the fee paid by a futures commission merchant for filing Form 7-R to register with the National Futures Association?
A. $500
B. $200
C. $100
D. $85
3. How much is the fee for filing a Form 8-R with the National Futures Association?
A. $500
B. $200
C. $100
D. $85
4. All the following are required of an FCM’s risk disclosure document except:
A. A summary of its current risk practices, controls, and procedures
B. Its most recent FOCUS report
C. The business address and business background of each of its principals
D. Public display on its website
5. A customer is unhappy over receiving a margin call. He asks his broker to show him where it says that he agreed to deposit the additional funds. Which document would the broker provide?
A. The risk disclosure statement
B. The signed acknowledgement of receipt of the risk disclosure statement
C. The signed commodity customer agreement
D. A copy of the firm’s margin call policy
6. Which of the following is required of discretionary accounts?
I. Written customer authorization prior to each trade
II. Regular supervisory review of discretionary trading activity
III. Clear identification of each discretionary account
IV. Written principal approval of time and price prior to each trade
A. I and IV
B. I and III
C. II and IV
D. II and III
7. Once a customer instructs her broker in writing to transfer her account to another firm, the carrying member must report to the receiving member all of the customer’s account balances and all open positions within:
A. Two business days
B. Three business days
C. Five business days
D. Five calendar days
8.