What percentage of revenue does Trading and Sales contribute?

Prepare for the GARP Financial Risk Manager (FRM) Part 1 Exam with our comprehensive quiz. Boost your confidence with engaging flashcards, detailed explanations, and multiple-choice questions. Get ready to ace your exam!

The correct answer indicates that Trading and Sales contribute 18% of the revenue. This percentage reflects the significant role that trading activities, including both proprietary trading and sales of financial instruments, play in the overall revenue generation of financial institutions.

In a typical investment bank or financial services firm, Trading and Sales is one of the core functions that drives profitability through market-making, facilitating transactions for clients, and taking advantage of market inefficiencies. The contribution of 18% highlights the importance of these activities in the broader scope of revenue generation, as firms often rely on trading operations to enhance their earnings and manage risks associated with their investment portfolios.

Understanding this percentage helps in analyzing the revenue structure of financial firms, as well as their dependence on various revenue streams, which is crucial for risk assessment and management in financial operations.

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