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Test your Fund Accounting for CFDs knowledge...

Page 1 Questions

This test is from the Quickstep online training module on Fund Accounting for Contracts for Difference (CFDs). At the end of the test you will be given your score. Full test results along with correct answers will be emailed to you.

Personal Details *This question is required.Please enter your full name, company name and email

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1. Which one of the following is true? *This question is required.

CFDs are over-the-counter instruments that can be used to gain exposure to equities, bonds, currencies, futures & options
CFDs are over-the-counter instruments that can be used to gain exposure to equities, bonds, currencies, indices & commodities
CFDs are exchange-traded instruments that can be used to gain exposure to equities, bonds, currencies, futures & options
CFDs are exchange-traded instruments that can be used to gain exposure to equities, bonds, currencies, indices & commodities

2. An investment manager expects the share price of Fiat to fall and decides to execute a CFD trade. Which of the following will she do? *This question is required.

Buy to open or open long
Sell to close or close long
Sell to open or open short
Buy to close or close short

3. The cost of a CFD depends on

The opening price
The closing price
The reset price
There is no cost

4. A fund has a short position of Regus CFDs. The share price has fallen since the fund opened the position. If Regus has a dividend go ex, which of the following would you expect? For the Regus position, the broker statement shows *This question is required.

Unrealised gain, interest income receivable, dividend expense payable
Unrealised gain, interest expense payable, dividend income receivable
Unrealised loss, interest income receivable, dividend expense payable
Unrealised loss, interest expense payable, dividend income receivable

5. A fund buys Sainsbury CFDs as follows: 100 at a price of £2, 100 at a price of £3 and 100 at a price of £4. The fund then sells 100 CFDs at a price of £5. The fund accounts for CFDs on a FIFO (first-in-first-out) basis. How much of a gain is realised upon the sell? *This question is required.

£300
£200
£100
zero

6. A fund has a long Rexel CFD position, 1000 CFDs. The dividend rate is €0.45 per share. The re-investment rate (price) is €15. What transaction needs to be booked to reflect the dividend re-investment? *This question is required.

Buy 450 CFDs
Buy 45 CFDs
Buy 30 CFDs
Buy 300 CFDs

7. A fund has a long position of Monte Dei Paschi CFDs when a rights issue takes place. What needs to be booked to reflect the rights issue? *This question is required.

Create a dummy CFD to represent the rights and book a BUY (‘buy to open’, ‘open long’) with an opening price of zero
Do nothing until the rights are exercised
Book a BUY of Monte Dei Paschi at a price of zero and a quantity determined by the terms of the rights issue
Book a BUY of Monte Dei Paschi at the right price and quantity determined by the terms of the rights issue

8. A fund has a short position of Infineon CFDs. A cash dividend is declared on 31st July. The ex date is 15th August, and the pay date is 27th August. The fund CFD positions are reset on the 8th of each month. When does the fund receive the cash dividend? *This question is required.

15th August
27th August
8th September
The fund does not receive the cash dividend