CISI UAE FRR Investment Products and Markets 2

Question 1

What distinguishes NASDAQ Dubai from the Dubai Financial Market (DFM)?

Accepted Answer

NASDAQ Dubai operates within the DIFC under DFSA regulation, while DFM is SCA-regulated

Answer

NASDAQ Dubai only trades commodities

Answer

They are the same exchange with different names

Answer

DFM only allows UAE nationals to trade

Question 2

What is the role of market makers on UAE stock exchanges?

Accepted Answer

To provide continuous buy and sell quotes to enhance market liquidity

Answer

To set listing fees for new companies

Answer

To audit listed companies

Answer

To approve new investor accounts

Question 3

What is the minimum capital requirement concept for UAE brokerage firms?

Accepted Answer

Brokerage firms must maintain prescribed minimum capital to ensure financial stability and client protection

Answer

There is no minimum capital requirement

Answer

Only AED 1,000 is required

Answer

Capital requirements only apply to foreign firms

Question 4

What type of collective investment scheme is most commonly offered to retail investors in the UAE?

Accepted Answer

Open-ended mutual funds

Answer

Hedge funds

Answer

Private equity funds

Answer

Venture capital funds

Question 5

What is the purpose of the investor protection fund maintained by UAE exchanges?

Accepted Answer

To compensate investors for losses caused by broker default or fraud

Answer

To guarantee investment returns

Answer

To provide interest-free loans to traders

Answer

To fund government infrastructure projects

Question 6

What is short selling and what is its regulatory status in the UAE?

Accepted Answer

Selling securities not owned by the seller; regulated and permitted under specific SCA rules

Answer

Buying securities on margin; always permitted

Answer

Selling securities at a discount; prohibited

Answer

Buying securities in foreign currencies; unregulated