How the IB model works quiz

1.In the introducing broker model, who holds the client's trading account and funds?

The introducing brokerThe client's own bank, with no broker involvedThe brokerThe introducing broker and the broker jointly

2.A client trades 10 standard lots of EUR/USD in a month with an average spread of 0.2 pips and a commission of 6 USD per round turn. What is their total trading cost before swaps?

80 USD60 USD20 USD120 USD

3.A broker quotes an IB rebate of 2 USD per side. What is that per round turn?

2 USD per round turn1 USD per round turn6 USD per round turn4 USD per round turn

4.Which commission model directly increases the trading costs paid by referred clients?

A per-lot rebate paid out of the broker's own revenueA spread mark-upA cost-per-acquisition feeNone of them can ever affect client costs

5.An illustrative agreement pays 3 USD per lot for fewer than 50 lots and 4 USD per lot from 50 lots, applied marginally. Your clients trade 80 lots in a month. What do you earn?

320 USD270 USD240 USD400 USD

6.Under a per-lot rebate agreement, your referred clients open accounts but none of them trades during the month. What commission do you earn for that month?

A standard minimum monthly paymentHalf the usual rateAn automatic cost-per-acquisition feeZero

7.Which of these activities is generally appropriate for an introducing broker without additional authorisation?

Explaining in general terms how to calculate position sizeAccepting a client's deposit into a personal accountLogging in to a client's account to place trades for themTelling a specific follower which trade to open right now

8.An IB plans to operate from the Dubai International Financial Centre (DIFC). Which regulator is relevant to confirm their obligations with?

The Capital Market Authority (CMA, formerly the SCA)The Financial Services Regulatory Authority (FSRA)The Dubai Financial Services Authority (DFSA)None, because introducing is never regulated in the UAE