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

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter3: Risk And Return: Part Ii

Section: Chapter Questions

Problem 4P

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QUESTION 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

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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The following is true about proprietary trading except: A Most investment banks have a Chinese wall to separate proprietary traders from client traders B Activities of proprietary trading is considered part of the banking book C Proprietary traders are market-makers so earn income based on the bid-ask spread D Proprietary trading can generate significant revenues for banking institutions
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