Leverage, Margin & Risk: Course Quiz

Course quiz

1. At 1:100 leverage, how much margin does a 50,000-dollar position require?

   50 dollars 500 dollars 5,000 dollars
2. What does higher leverage change about a trade?

   The chance of being right How far the market moves How much of the account each pip is worth
3. Equity 10,000. Open positions total 40,000 in notional value. What is used leverage?

   1:4 1:40 1:0.25
4. At an effective leverage of 1:25, what adverse move across all positions loses the entire account?

   25 percent 4 percent 1 percent
5. One mini lot of USD/JPY, 10,000 dollars notional, at 1:50. What is the required margin?

   50 dollars 200 dollars 500 dollars
6. Equity 3,000, used margin 2,000. Margin level?

   66 percent 150 percent 1,500 percent
7. What does a broker do at the stop-out level?

   Sends a warning email Closes positions automatically, usually the largest loser first Freezes the account for a week
8. You enter 0.03 in the volume field on EUR/USD. How many euros is that?

   300 3,000 30,000
9. One mini lot of USD/CAD at 1.3500 in a USD account. Pip value?

   1.00 dollar 0.74 dollars 1.35 dollars
10. Account 20,000, risk 1 percent, stop 50 pips, pip value 10 dollars per lot. Lot size?

    0.04 0.40 4.00
11. Seven consecutive losses at 1 percent risk per trade cost about:

    7 percent of the account About 6.8 percent, because each loss is 1 percent of a shrinking balance 14 percent
12. A strategy uses a 25-pip stop and a 75-pip target. What win rate breaks even before costs?

    25 percent 33 percent 75 percent
13. An account falls 40 percent from its peak. What gain recovers it?

    40 percent 60 percent 67 percent
14. You are long EUR/USD and short USD/CHF, each at 1 percent risk. What is your effective exposure to a dollar rally?

    Two independent 1 percent risks About 2 percent on the same idea Zero, because they cancel
15. Account 8,000, risk 0.5 percent, stop 20 pips, pip value 10 dollars per lot. Lot size?

    0.02 0.20 2.00
16. Which number does the broker act on at margin call and stop-out?

    Balance Free margin Margin level
17. A 25 percent drawdown needs what gain to recover?

    25 percent 33 percent 50 percent