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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

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
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

  1. 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

    1. 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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