Binance Leveraged Token Quiz Answers

A leveraged token is a collection of perpetual contract holdings. Here, we have provided the Binance Leveraged Token Quiz answers, just for you.

Leveraged Tokens on Binance are some derivatives that provide leveraged exposure to underlying assets. These leveraged tokens, like other coins, can be bought and sold on the Binance open market.

A leveraged token price level could go up or down depending on price fluctuations in the perpetual contract market. However, you can’t start trading Binance leveraged tokens unless you pass the leveraged token quiz.

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This quiz has 11 questions with varying difficulty levels. Below, we have the Binance Leveraged Token quiz including the choices and their answers.

Binance Leveraged Token Quiz and Answers

Question 1:

What is Binance Leveraged Tokens?

Options:

1. Binance Leveraged Tokens is a financial derivative which is similar in nature to traditional leveraged ETFs. Their net asset value may be greatly worn out by short-term market fluctuations. Long term holding of Binance Leveraged Tokens is risky and users should minimise the losses by selling the leveraged tokens from time to time. – Correct Answer
2. Binance Leveraged Tokens is a cryptocurrency which you can withdraw the tokens out anytime.
3. Binance Leveraged Tokens is a futures contract which you adjust leverage level from time to time.

Question 2:

What is the leverage multiplier for Binance Leveraged Tokens?

Options:

1. The system maintains a target leverage range between 1.25x and 4x. – Correct Answer
2. It is always 4x.
3. It is always 1.25x.

Question 3:

When does Binance Leveraged Tokens rebalance?

Options:

1. Every 8 hours.
2. Every day.
3. When the market is volatile or the actual leverage multiplier is out of the target leverage range. – Correct Answer

Question 4:

What is the worst case scenario of holding Binance Leveraged Tokens on a long term basis?

Options:

1. Binance Leveraged Tokens is a good store of value and the value will increase over time.
2. Users can receive interest income for holding Binance Leveraged Tokens on a long term basis.
3. The value of Binance Leveraged Tokens can become zero (0) and cannot be recovered due to inherent market risks, high fees, slippage, rebalance algorithm frontrunning and any other perceived unknown risks associated with Binance Leveraged Tokens. – Correct Answer

Question 5:

Which one of these fees is NOT associated with Binance Leveraged Tokens?

Options:

1. Asset custody fees. – Correct Answer
2. Trading fees.
3. Subscription and redemption fees.

Question 6:

Which one of these is NOT a cost associated with holding Binance Leveraged Tokens?

Options:

1. Daily management fees and reflected directly in the net asset value of the Binance Leveraged Tokens.
2. Funding fees for basket positions and reflected directly in the net asset value of the Binance Leveraged Tokens.
3. Profit sharing fees. – Correct Answer

Question 7:

By trading Binance Leveraged Tokens, you do not need to maintain margin maintenance and worry about the liquidation risk. However, Binance Leveraged Tokens is not completely risk-free. Which one of these is NOT a risk associated with holding Binance Leveraged Tokens long-term?

Options:

1. Continuing to be charged management fees and funding fees.
2. Erosion of net asset value (NAV) due to rebalancing and volatility decay when there is no obvious trend in the market.
3. Receiving interest payment. – Correct Answer

Question 8:

Why are subscription and redemption of Binance Leveraged Tokens not recommended during normal trading time?

Options:

1. Subscription and redemption fees are higher than trading fees and there is a limit on how many leveraged tokens users can subscribe or redeem daily. – Correct Answer
2. Binance Leveraged Tokens is a cryptocurrency which you can withdraw the tokens out anytime.

Question 9:

Which one of these actions is NOT required to complete before trading Binance Leveraged Tokens?

Options:

1. Opening a Margin Account. – Correct Answer
2. Completing the Binance Leveraged Token questionnaire and agreeing to the terms and conditions in the Binance Leveraged Token Risk Disclosure.

Question 10:

What would a responsible trader likely do, if they incur consecutive losses?

Options:

1. Continue trading until they earn back their capital.
2. Cut losses timely and control risk exposure. – Correct Answer

Question 11:

As a leveraged tokens trader, you should fully understand the risks associated with leveraged tokens trading and solely responsible and liable for any losses associated with trading activities on your account.

Options:

1. Yes, I agree. – Correct Answer
2. No, I disagree

Conclusion

We have supplied you with all the correct answers to this quiz. Simply fill in the correct option to pass the Leverage token quiz, and then you can start trading leveraged tokens on Binance.

Please, bear in mind that leveraged tokens cannot be withdrawn. Instead, they have only stored them on your Binance account.

When trading with trading leveraged tokens, you pay a 0.1% fee per subscription, a 0.1% fee per redemption, and a 0.01% daily management fee. This trading fee is similar to the spot trading fee.

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