When applying for an account with BlackBull Markets, you may have to complete a suitability quiz. You will be given 5 multi-choice questions and must answer at least 4 questions correctly in order to pass.
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Suitability Quiz #
1. What are financial derivatives (e.g. CFDs and perpetual futures)?
- Financial contracts whose value depend on the price of another asset, such as currencies, stocks, or commodities.
- Instruments that provide direct ownership of physical assets.
- Fixed-income products that pay a set return regardless of market conditions.
- Savings accounts that pay a guaranteed interest rate set by a bank.
2. Which statement best describes how leverage works in trading?
- It allows traders to control larger positions with a smaller amount of capital, increasing both potential profits and losses.
- Leverage guarantees profits on every trade.
- Leverage removes all risks by protecting traders from losses.
- Leverage freezes the price you enter, so it never changes.
3. What is a spread?
- The difference between the price you can buy at (ask price) and the price you can sell at (bid price).
- The tax you pay on all your trading profits.
- A type of company loan.
- The amount of money needed to open a trade.
4. Which of the following can affect the price of financial derivatives?
- Economic data
- Global events
- Interest rates
- All of the above. Economic data, global events, and interest rates, as they can influence the underlying asset’s price.
5. Who is responsible for your trading decisions?
5. Who is responsible for your trading decisions?
- Your broker.
- Your account manager.
- Your accountant.
- You are responsible for your own trading decisions.
6. What are swaps in financial derivatives trading?
- Overnight charges or credits based on interest rate differences, typically applied when holding a position overnight in derivatives trading.
- A measure of how volatile the market is.
- A type of corporate bond.
- A government policy used to control inflation.
7. What happens if a trader ignores a margin call?
- The broker keeps positions open until the market recovers.
- The trader is only charged a small fee, and nothing else happens.
- If a trader ignores a margin call, the broker may automatically close positions to limit further losses and reduce risk.
- The broker adds money to the account to keep positions open.
8. What is the main purpose of a stop-loss order?
- To help limit potential losses if the market moves against your position by automatically closing your trade at a specified price.
- To lock in the maximum possible profit.
- To reduce the spread on a trade.
- To increase the amount of margin available.
9. What is a common outcome of poor risk management?
- Large losses that can significantly reduce your account balance, potentially leading to the closure of positions or a margin call.
- Guaranteed margin calls.
- Lower spreads on trades.
- Faster execution speed.
10. What is slippage?
- The difference between the expected price of a trade and the actual execution price, often caused by market volatility or low liquidity.
- A feature that guarantees your trade is always filled at a better price.
- A setting that freezes the market price until your trade is executed.
- An automatic bonus added to your account during fast-moving markets.