CAIA Level I: Chapter 2 questions with correct answers
'40 Act Funds (Mutual Funds) - Answer Registered investment pools offering their shareholders pro rata claims on the fund's portfolio of assets. Back Office Operations - Answer Play a supportive role in the maintenance of accounts and information systems used to transmit important market and trader information in all trading transactions, as well as in the clearance and settlement of the trades. bid-ask spread - Answer The price difference between the highest bid price (the best bid price) and the lowest offer (the best ask price) Buy side - Answer Institutions and entities that buy large quantities of securities for the portfolios they manage Closed-end mutual funds - Answer Provide investors with relatively liquid access to the returns of underlying assets even when the underlying assets are illiquid Commercial Bank - Answer Focuses on the business of accepting deposits and making loans with modest investment-related services Custodians - Answer Responsible for holding their clients' cash and securities and settling clients' trades Dark pool - Answer A non-exchange trading by large market participants that is hidden from the view of most market participants
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