What is the Suitability Quiz?

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.
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