Knowledge Base

← Financial Instruments, Crypto-Assets, and Their Risks

Questions

Which body identified the conflict of interest as a major concern justifying its regulatory intervention regarding CFDs?

AMF (Autorité des Marchés Financiers)
ESMA (European Securities and Markets Authority)
FCA (Financial Conduct Authority)
SEC (Securities and Exchange Commission)

What is the typical leverage historically offered by some CFD platforms?

10:1
50:1
200:1
500:1

What is the minimum probability needed for the investor to break even with binary options offering an 80% gain and a 100% loss?

40%
50%
60%
70%

What is the main characteristic of binary options that makes them similar to gambling?

Their high mathematical complexity
Their 'all or nothing' payout structure
Their long holding period
Their high liquidity

The expected value of binary options is always negative, even with a 55% success rate.

True
False

Categorize items by dragging them to the appropriate zones

Items to categorize:

Spread
Overnight fees
Explicit commissions
Categories:

Implicit costs

Explicit costs

Margin mechanism in CFDs

Click to see answer

CFDs allow the investor to hold ownership of the underlying asset.

True
False