Hello,
Please do kindly take a look at the below questions pertaining
to CMFAS M1B examination, if you are M1B qualified or going to sit
for the papers like me, your contribution will be very, very much
appreciated.
1. 2 Licensees, ABC and EFG Co Ltd. EFG is
interested to purchase 1000 XXX shares, and ABC happen to have
sufficient XXX shares in their own account. What can ABC
do?(A) Sell 1000 shares to EFG.
(B) Disclose to EFG that the shares belong to ABC
(C) Sell 500 shares to EFG (D)
Cannot sell anything to EFG
2. ABC Company, a Licensee, has come into contact with news that
QQ Company is facing financial difficulties, and the announcement
of news on 10 January will certainly bring the shares of QQ Company
crashing down. Now, Mr Peter, a customer of ABC, requested them to
buy in 100,000 shares of QQ on 6 January. ABC revealed to Mr Peter
about the bad news, but Mr Peter insisted on buying. ABC then
discloses then it will act as principal and sell Mr Peter the
shares as they have 10 lots in their account. If ABC Company is
charged of insider trading, they (A) Have a valid
defence (B) Liable to compensate Mr Peter
(C) Is guilty of insider trading
(D) None of the above.
3. Mr John, CEO of Burger Co, has entered into an agreement to
buy over Ketchup Store, a subsidary of Hotdog Corp. The agreement
will be announced on 10 January. As the buyover was to ease the
debts of Hotdog Corp, news will crash the shares of Hotdog. Due to
internal procedures and standards, Mr John was barred from
communicating this to anyone, thus he was unable to do so. Mr
Jerry, another executive director of Burger Co, sold 10,000 shares
of Hotdog Corp on 8 January. Who is guilty of insider trading?
(A) Burger Co (B) Mr John
(C) Mr Jerry (D) None of the
above.
4. Patrick, a licensed representative, received instructions
from his wife, Gail, to purchase XYZ shares at
$1.80 at 9 a.m. At 9.30 a.m, Patrick received instructions from his
customer, Gen, to purchase XYZ shares at $1.78. As Patrick was
unable to match Gail's order, he withdrew them and entered Gen's
orders. Can Patrick still key in Gail's orders after that?
(A) Yes, since her bid price is higher
(B) Yes, since her order was before Gen
(C) No, her order cannot be keyed in anymore
5. Patrick, a licensed representative, received orders from Mrs
ABC to purchase 5,000 shares of QQ Company. 30 minutes later, he
received orders from Mr ABC, husband of Mrs ABC, to sell off 5,000
shares of QQ Company. Mr and Mrs ABC are trading from their own
individual accounts, and appeared to have no mutual knowledge about
one another's actions and intentions. Can Patrick put through the
trade?
My apologies for a somewhat lengthy post, but I would be very
grateful if anyone could shed some light on the above
questions.
Thanks!