FISD FINAL STUDY (1) The Market Quiz Questions , (2) The DATA Quiz Questions, (3) Technology Quiz Questions, (4) Industry Issues 4 Quiz Questions

What is a Crypto Currency?

A digital asset

An individual investor, investing and trading for their own account

Is on the sell side when selling and on the buy side when buying

The use of Volume Weighted Average Price (VWAP) is a useful measure to indicate...

...if best execution was obtained in a trade by its ability to indicate if adverse market impact occurred.

What is Bitcoin

A Crypto Currency

An NRSRO is:

A Nationally Recognized Statistical Reporting Organization as the SEC's designation for a credit reporting agency

The office of financial research is

A US regulator rooted in the Dodd Frank Act

An example of a portfolio manager practicing active management would be one of

A belief that by superior research, he or she can select stocks (as a stock picker) that produce superior returns over time

The difference between a closing price and a valuation is:

A closing price is based on a last sale at a set time and a valuation is a modeled price and more of a theoretical closing price

Options, CDOs, CFDs and swaps are all examples of

A derivative instrument (e.g. it is derived from another instrument and is not the underlying instrument itself)

A bond is best described as

A loan instrument, typically long term in nature that pays interest (e.g. fixed income)

How is a "proprietary trader" different from an "agency broker"?

A proprietary trader acts as the principal in a deal whereas an agency broker only ever acts on behalf of a client

The FIX protocol is:

A standard that supports the trading function between counterparties

How do you best describe the concept of "co-location"

A trading or investment firm physically installs some or all of its trading applications at the site of the electronic trading venue (e.g. an exchange)

Which is a Sovereign Wealth Fund

Abu Dhabi Investment Authority

The role of governments and regulators in the financial markets include

Acting as both participants and regulators in many instances - as both borrowers and rulemaking authorities

Regulatory filings by publicly traded companies will typically include:

An annual report, in the US to the SEC with the company's 10k report - with its balance sheet & income statement

The rise in ATS and MTF alternative exchanges has been driven primarily by

An increase in regulatory enforcement to provide additional trading venues and increase market venues

For what type of financial instrument would you expect investors to be interested in "Constituents"?

An index

Index management is

An investment style characterized as "owning the overall market" and generally owning the constituents of an index such as the S&P500 or the MSCI EAFE index

A securities analyst who subscribes to the research discipline of "fundamental analysis" could be expected to

Study company balance sheets and income statement data to provide buy/sell valuations and ideas for stock selection

Fixed income instruments available on non-traditional exchanges have seen a growing trend to more open forms of

Price transparency that includes bid and offer prices made available on electronic platforms that in turn can act as an alternative to an exchange and transact a trade between two parties over their system

Indices are considered useful representations of a market or sector as a:

Benchmark for the overall performance and returns of a particular market, sector, industry or other market measure

What type of information does exchange generated data typically include?

Bid, offer, trade and volume, Level 1 and Level 2 data, real time quote data.

Equities include which classes of assets

Common and preferred stock

The lifecycle of the trade includes the following component(s)

Pre-trade analysis that may include a number of decision-making methodologies in selecting securities to buy or sell

Traditional exchanges have largely moved from an open outcry transaction protocol to what common form of trade execution

Electronic trading

Which of the below are ALL examples of a central bank?

Bank of England, Bank of Japan, Federal Reserve

Participants in the capital markets include?

Buy side, sell side, governments & regulators

Examples of ISO standards in market data would be:

ISO Standards for FIX, Corporate Actions and the LEI

Which of the following countries are not members of the European Union

Iceland, Montenegro, Kosovo

The name of a company's security that is a member of an index is commonly referred to as a(n):

Constituent/Index Constituent

An instrument termed a "derivative" is primarily characterized as being

Constructed and based on another security and not necessarily a security in and of itself

A mortgage backed security is

Constructed by combining and a pooling of underlying home mortgages into a bond like security

In what context would KYC be most relevant?

Counterparty reference data

What does the term "contributed data" refer to?

Data "contributed" by broker dealers to solicit the sale of their inventory and offerings to the buy side.

Trends that have evolved from the concept of low latency include...

Direct Market Access, Co-Location, and Algo Trading

Corporate actions data typically include:

Dividend payments, a bond interest coupon payment or a stock split

Which organizations/vendors are commonly associated with news services?

Dow Jones, Reuters, Bloomberg

What best describes 'Front Running'

Entering into a trade, to capitalize on advance, non-public knowledge of a large ("block") pending transaction that will influence the price of the underlying security

A compliance manager would typically monitor risk exposure using what types of market data

Entity level reference data, performance (returns and attribution) data

What does the E stand for in ESG?

Environmental

The formulation of "capital" is based on the primary issuance of which two types of financial instrument?

Equity shares and bonds

The following two elements are not part of the trade lifecycle: 1) best execution is obtained by the trader at a venue with the best available price and 2) settlement of the trade and exchange of ownership and payment is then processed by a clearing firm

False

True or False: Share ownership data on publicly listed companies is not an example of fundamental data.

False

True or False: There are no challenges when performing statistical analysis on data that includes weekends and holidays.

False

The concept of fee liable exchange data is typically fee liable when?

Fee liable when the data is provided in real time, up to a set delay such as 15 minutes.

A commodity is

Is generally a physical good such as wheat or gold

Credit ratings are useful in determining risk and valuation of what type of asset class:

Fixed income securities

For what type of financial instrument would you expect investors to be interested in "yield to maturity"?

Fixed income securities e.g. bonds

The key differences between front, middle and back office tasks are best described as

Front office is customer facing, including investment management and trading, whereas the back office is primarily operations - and both are supported by systems, data and applications coined as the middle office

A money market instrument is

Generally a short term loan that matures in under one year

End of Day Pricing is...

Generally used for accounting functions

Exchanges seek to capture as much trading volume as possible by:

Having the largest pool of liquidity to facilitate efficient trading in a given security.

Market data management as a discipline is relatively new because

In the past, market data content was printed content (non-electronic) and managed by investment libraries

MSCI, FTSE, Russell, Dow Jones, S&P, Wilshire are vendors commonly associated with which type of data?

Index data.

What would you most associate with 'Passive' Investing

Index trackers

Which vendors are commonly associated with end of day fixed income evaluations?

Interactive Data, Markit, Refinitiv

An interdealer broker acts as a(n)

Intermediary between two or more brokerage firms to cross fixed income trades where the anonymity of the broker can be preserved and broker's intent and interest are thereby not disclosed to the counterparty prior to the trade

An example of the role performed by a trader would be to

Know and work the available trading venues to buy and sell securities at the best bid or offer, with minimal market impact, obtaining "best execution"

Common non-traditional exchanges or crossing networks are

Known as an ATS in the US markets and MTF in the European Union

NYSE/Euronext, NASDAQ, Deutsche Borse are all...

Stock exchanges.

A user of charting data and price history is typically engaged in what type of research function

Technical analysis

What best describes the difference between "Level 1" and "Level 2" data from an exchange?

Level 1 data displays only the best bid and offer whereas Level 2 provides data on greater depth e.g. more orders or quotes in that market

The difference between Level 1 and Level 2 Data is:

Level 1 data displays only the best bid and offer; Level 2 provides data at a greater depth (volume, more orders or quotes in that market)

An example of a post trade operation would be

Managing a nightly securities pricing and corporate actions file to perform account valuations for customer portfolios

An example of an operations manager's role would be one of

Managing a nightly securities pricing and corporate actions file to perform account valuations for customer portfolios.

Vendors typically seek to add value to market data by doing what?

Managing standards for completeness, accuracy, timeliness and reliability of the data service.

The S&P500 is a __________weighted index / and the Dow Jones Industrials is a _____________weighted index.

Market Capitalization/ Price

The capital formulation process is primarily to provide what function?

Match large scale funding needs with sources of surplus funds

Which are/is examples of government regulators in the financial markets

The ESMA

Identify examples of buy side firms

Mutual fund companies

Which of the following are examples of exchange data:

NBBO, level 1, bid and ask

Which of the following best describes news and commentary?

News and commentary may be delivered in a streaming broadcast, a pushed update or a snapshot - request/retrieval

In the financial markets, which two types of business is Dow Jones best known for?

Newswires and stock market indices

A securities analyst who subscribes to the research discipline of "technical analysis" could be expected to

Observe and study time series data of closing market prices over time to identify patterns that inform the likely expected direction of a securities stock price based on what is termed "technical data" such as pricing data

The difference between originators and aggregators is:

Originators collect data or create it themselves, but aggregators will combine and integrate data from third parties/outside sources in a meaningful way.

What is a good example of an 'Asset Owner'

Pension Fund

Which of the following currencies no longer exist (as of 2021)

The Italian Lira, The German Deutschemark, the French Franc

Common functions provided by a traditional exchange include

Providing participants with data about securities available for buying and selling (bids & offers)

Faster access to exchange quote data has triggered an industry around co-location services. Co-location/proximity hosting is:

Reducing latency (delay) to speed of light by physically connecting to the exchange order matching engine at the same physical site.

Which of the following vendor(s) provide valuation services?

Refinitiv

Name two Desktop terminals providers.

Refinitiv and Bloomberg

What is the main area of difference between a 'Family Office' and a 'Hedge Fund'

Regulation

The term LEI is defined as:

The Legal Entity Identifier, an emerging identifier standard with broad global support

Historical data is typically used for what types of research?

Securities research, technical analysis and back testing strategies.

SWIFT or the Society of Worldwide Interbank Telecommunications is widely known for:

Setting the standards and the management of interbank money transfers globally

A government and agency bond is primarily

Simply the debt or borrowings of a government or quasi government agency

True or False: One characteristic of reference data is that it is relatively "static" data, meaning most data elements rarely change over the life of an instrument.

True

One of the key challenges with managing historical data include:

Sourcing historical data due to the propensity for large volumes of data to be purged from system

The term "reference data" is used broadly to describe:

The descriptive data about a security such as its coupon, maturity and whether or not callable if a bond

Options are best described as

The right to purchase a stock at a set price by a certain date in time, but not an obligation to do so

A common function of the traditional exchange is to set policies and practices to assure all participants are treated equally

True

An individual investor, investing and trading for their own account, would typically buy and sell in the secondary markets using a brokerage (sell side) firm

True

The FSA and ECB are examples of regulators but the European Parliament is not

True

True or False: An index said to be market capitalization weighted is one where the constituents are weighted based on the company's total value or capitalization (share price x shares outstanding).

True

True or False: Elementized news is becoming an increasingly important data set used in algo trading.

True

Standards are seen as important in the market data discipline for the purposes of:

Uniformity in instruments, definitions and to support efficiency in global markets

Participants in a commodities exchange may be transacting the following types of goods

Wheat futures, pork bellies, frozen concentrated orange juice

What best describes the phrase "secondary market"?

Where instruments that have already been issued are subsequently traded i.e. bought and sold many times over

Would annual reports and account from public companies e.g. P&L, balance sheets be considered to be "fundamental data"?

Yes.