CMFAS RES 12B (Set 2)

SGD 39.90

4 Sep 2025

CMFAS RES 12B Exam Question

A dealer receives a client’s order to purchase a derivative product. However, the dealer is aware that the market conditions suggest the price may decline shortly after the trade is executed. Which of the following actions is considered a violation?

a) The dealer executes the trade immediately, but informs the client of the risks and potential market changes.

b) The dealer proceeds with the trade immediately, without informing the client about the anticipated market movement, to meet the client’s request.

c) The dealer delays the execution of the order to seek a better price, keeping the client informed about the reasoning behind the delay.

d) The dealer advises the client to reconsider the trade based on anticipated market conditions, but proceeds with the order if the client insists.

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    A dealer receives a call from a client instructing them to purchase a security that the dealer knows is highly speculative and unsuitable for the client’s risk tolerance. However, the client insists on executing the trade. Which of the following is the most appropriate action?

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    d) The dealer should execute the trade immediately but document the client’s insistence on the trade to protect themselves from potential future complaints.

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