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NEW QUESTION: 1
An investment adviser or its representative may
A. exercise discretionary power in the purchase or sale of securities for a client's account as long as it
receives written discretionary authority over the account within 10 business days of the first discretionary
transaction placed, assuming oral authority has already been given.
B. exercise discretionary power in the purchase or sale of securities for a client's account as long as
C. only exercise any discretionary power in the purchase or sale of securities for a client's account after
receiving written authority prior to the execution of the transactions.
D. exercise discretionary power in the purchase or sale of securities for a client's account only after
Answer: A
Explanation:
An investment adviser or its representative may exercise discretionary power in the
purchase or sale of securities for a client's account as long as it receives written discretionary authority
over the account within 10 business days of the first transaction placed, assuming oral authority has
already been given.
NEW QUESTION: 2
Which of the following are elements of 'group risk':
I. Market risk
II. Intra-group exposures
III. Reputational contagion
IV. Complex group structures
A. I and IV
B. II, III and IV
C. II and III
D. I and II
Answer: B
Explanation:
Explanation
The term 'group risk' has been defined in the FSA document 08/24 on stress testing as the risk that a firm may be adversely affected by an occurrence (financial or non-financial) in another group entity or an occurrence that affects ther group as a whole. These risks may occur through:
- reputational contagion,
- financial contagion,
- leveraging,
- double or multiple gearing,
- concentrations and large exposures (particularly intra-group).
Thus, the insurance sector may be considered a group, and a firm may suffer just because another group firm has had losses or reputational issues.
The FSA statement goes on to identify some elements of group risk as follows:
- intra-group exposures (credit or operational exposures through outsourcing or service arrangements, as well as more standard business exposures);
- concentration risks (from credit, market or insurance risks which could put a strain on capital resources across entities simultaneously);
- contagion (reputational damage, operational or financial pressures); and
- complex group structures (with dependencies, complex split of responsibilities and accountabilities).
Therefore Choice 'a' is the correct answer and the rest of the choices are incorrect.
NEW QUESTION: 3
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B. Both A & B
C. None of the above is true
D. A statement of which end items are to be produced, the quantity of each, and the dates they are to be completed
Answer: B
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