The following is true about proprietary trading except: Most investment banks have a Chinese wall to separate proprietary traders from client traders Activities of proprietary trading is considered part of the banking book Proprietary traders are market-makers so earn income based on the bid-ask spread Proprietary trading can generate significant revenues for banking institutions
The following is true about proprietary trading except: Most investment banks have a Chinese wall to separate proprietary traders from client traders Activities of proprietary trading is considered part of the banking book Proprietary traders are market-makers so earn income based on the bid-ask spread Proprietary trading can generate significant revenues for banking institutions
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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QUESTION 1
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The following is true about proprietary trading except:
Most investment banks have a Chinese wall to separate proprietary traders from client traders
Activities of proprietary trading is considered part of the banking book
Proprietary traders are market-makers so earn income based on the bid-ask spread
Proprietary trading can generate significant revenues for banking institutions
QUESTION 2
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The following methods are used to measure market risk in the industry, except
Regression method
Historical simulation method
Delta-normal method
Monte Carlo method
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