Series 30 Part 2

A stop order to buy becomes a market order when there is an execution or bid at the stop price.

According to the NFA rules, even if an IB is not involved with placing any orders for a customer, the IB is still required to keep a complete record of trades.

A speculator may exceed the CFTC speculative position limits by establishing her position on two different exchanges.

The content of commodity promotional material to be broadcast over the radio is regulated by the FCC.

If a customer has granted power of attorney to an individual o handle his account, the member firm must:

Arbitration is used as a means of dispute settlement. Decisions of arbitrators may NOT be appealed.

A stop order to sell would be to liquidate a long position in a falling market?

A settlement between a respondent and the NFA may be settled in a manner that neither admits nor denies the allegation contained in the complaint.

A pool has operated for seven years. The pool operator must include the entire performance history in the disclosure document

If a speculator wishes to avoid having to report her potion in regulated commodities, she may do so by opening accounts at different member firms and making certain that no single account reaches the reporting level.

A CPO must conduct any pool he operates as a separate entity from his own business.

With respect to all written option customer complaints, a firm must make and retain a written summary of the matter raised by the complainant and the firm's response.

According to Rule 2-30(Know Your Customer) if the customer refuses to disclose any additional information about herself, the account may be opened if it is:

An IB may be guaranteed by more than one FCM.

A Commodity Pool Operator must distribute an account statement monthly for pools with net assets of more than $200,000.

A buying hedge would be used by:

An FCM that guarantees an IB is responsible to customers of the IB in arbitration and reparations proceedings, but the FCM is not subject to NFA disciplinary actions for violations by the IB.

Exchange rules state that authorization fro discretion mus be in writing and revoked in writing or upon the death of the customer or the death of the AP.

A customer places an order with her IB. When the order is executed, the FCM calls the IB to report the execution. The IB does not need to time-stamp the report of execution since that is the responsibility of the FCM.

The disclosure document for a commodity pool does not need to include as part of the performance information the number of units outstanding, since this could fluctuate, making such figures misleading.

To handle a discretionary account, an AP must have at least two years experience and to be continuously registered during this period.

Up-front fees reduce pool performance during the initial period in which they are charged, unless the fees can be amortized under the generally accepted accounting principles.

Information that does not need to be contained in a CPO/CTA Risk Disclosure Document includes

A FCM send a confirmation to s customer for the purchase of five futures contracts. Which of the following statements is true regarding commission disclosure on this confirmation?

If a firm is an NFA member, it may receive customer funds in its name.

A broker may transfer funds from a client's regulated commodity account to a stock account of the client if the client has signed the Supplemental Commodity Customer's Agreement Form.

The Option Risk Disclosure Document must contain

After an IB places an order it has received from its customer with the carrying FCM, the IB need not keep the order ticket because the FCM is required to keep the order ticket it prepares when the order is received from the IB.

A written demand left at the office of the customer for an additional margin deposit because of adverse fluctuations in the marketplace shall be deemed sufficient notification if the FCM is unable to effect personal contact with the customer.

A commodity pool has operated for four years. The CPO must disclose the entire performance history preparing the disclosure document.

Margin due from a clearing house member based on the settlement prices is payable to clearing house:

A Commodity Pool Operator would be exempt from registering as a CPO if the value of the pool is $100,000 and there are five participants in the pool.

A customer buys a futures contract. The price drops below the original margin level but is above the maintenance level. The customer may buy additional contracts based on the excess equity above the maintenance level.

According to NFA rules and CFTC regulations, an NFA member or AP of an NFA member has an obligation to verify a customer's income and net worth.

A CPO must submit two copies of its proposed disclosure document to the CFTC at least 21 days prior to its intended use. Therefore, it is not required to submit a copy to the NFA.

A stop order to buy would be used to offset a short position in a rising market.

Which of the following situations best defines a bunched order?

CPOs that charge up-front fee must disclose this fact to the customer but this information does not need to be in the disclosure document.

The Commodity Pool Operator must distribute the account statement to the pool participants at least monthly in the case of pools with net assets of more then $500,000 at the beginning of the pool's fiscal year.

An AP has opened a discretionary account with a client. Which of the following choices is NOT a requirement?

In a bona fide hedge account, the customer

A FCM is under a continuous obligation to supervise discretionary accounts. One the requirements is that all trading activities in a discretionary account be reviewed.

An AP has created a chart that projects hypothetical performance based on trading results over the past three years. Which two statements below are TRUE?

If a customer wants a guarantee that she will not lose more then a specified amount, you could recommend that she place a stop order, which will insure an execution at the stop price.

A stop order to buy is entered.

Your firm uses a prepared script for training sales people in the telephone solicitation activities. At the top of each page of the script, the following statement is stamped in bold print. FOR TRAINING PURPOSES ONLY. Which of the following statement is TRUE regarding the use of his training material?

A registered CPO who acts as a trading advisor to that pool must also be registered as a CTA

Your firm is registered as a CPO and is preparing hypothetical composite performance data for its marketing activities. What information must be included in the promotional material?

CPOs must include in the disclosure document, at least quarterly, all withdrawals, redemptions, and additions to the pool.

Generally, hypothetical performance illustration for commodity pools will show a positive rate of return over their projected life. The main reason for this positive projection can be attributed to the fact that: