When an Employee Executes a Personal Trade in Advance of a Client's

question 296

Multiple Choice

When an employee executes a personal trade in advance of a client's or institution's order to benefit from the anticipated movement in the market price following the execution of a large trade, it is called:

• A) front running
• B) ex ante trading
• C) insider dealing
• D) forward-facing

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Definitions:

Warranty Obligations

Liabilities recognized by a company to cover the costs of repairs or replacements for products sold within a specified warranty period.

Discount Rate

The interest rate used to discount future cash flows of a financial instrument to present value.

Present Obligation

A duty or responsibility that is expected to be settled in the future, recognized as a liability.