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Are you looking to start crypto trading with leverage on the Binance exchange? Before starting margin trading on Binance, you must answer all the questions on the Binance Margin quiz. This assessment tests your knowledge of trading with margin, its associated risks, and the relevant measures you should take for your financial security.
You cannot trade margin on the exchange until you pass the Binance Margin Trading Quiz. While the test is relatively straightforward, this requirement can create problems for many crypto investors who want to start margin trading.
So, let’s dive into this Binance guide, where we provide you with everything you need to answer the Binance Margin Quiz questions for 2024.
Please beware; trading cryptocurrency is extremely risky, especially with a margin.
Binance Margin Quiz Answers for December 2024
Below, we have compiled the latest answers to the 12 questions in the Binance margin quiz. Once you have completed the quiz, you can start trading with leverage.
Binance Margin Quiz Question 1: Margin & Isolated Margin
Question 1: Binance Margin includes cross margin and isolated margin. Which one of the following sentences does not describe their difference?
Answer Options:
- In isolated margin, borrowing, trading, and risk management functions are included in an independent isolated margin account, while in cross margin, each user can only open one cross margin account where borrowing, trading, and risk management functions are available.
- They have different interest rates
- They have different maximum leverage ratio
- They support different borrowables
Binance Margin Quiz Answer 1: They have different interest rates
Binance Margin Quiz Question 2: How is Margin Level Calculated?
Question 2: Margin level is used to evaluate the risk level of your margin account. How is the margin level calculated?
Answer Options:
- In isolated margin, borrowing, trading, and risk management functions are included in an independent isolated margin account, while in cross margin, each user can only open one cross margin account where borrowing, trading, and risk management functions are available.
- They have different interest rates
- They have a different maximum leverage ratio
- They support different borrowables
Binance Margin Quiz Answer 2: They have different interest rates
Binance Margin Quiz Question 3: Events that Will Force Liquidation
Question 3: Which one of the following events will force you to liquidate?
Answer Options:
- The margin level has reached the liquidation level
- The current margin level has reached the initial margin level
- The total debt is lower than the total interest
Binance Margin Quiz Answer 3: The margin level has reached the liquidation level
Binance Margin Quiz Question 4: Margin Interest Calculations
Question 4: How often is margin interest calculated?
Answer Options:
- Hourly, at the time of borrowing
- Daily
- Monthly
Binance Margin Quiz Answer 4: Hourly, at the time of borrowing
Binance Margin Quiz Question 5: Manual Borrowing
Question 5: Do you need to borrow manually before trading?
Answer Options:
- Yes
- No, you can use the “Auto Borrow” function on the trading page
Binance Margin Quiz Answer 5: No, you can use the “Auto Borrow” function on the trading page
Binance Margin Quiz Question 6: Maximum Borrowing
Question 6: Which one of the following factors does not affect your maximum borrowing limit?
Answer Options:
- The borrowing period
- The amount of funds in your margin account
- Your VIP level
- The system borrowing limit
- Your individual borrowing limit
Binance Margin Quiz Answer 6: The borrowing period
Binance Margin Quiz Question 7: Borrowing Interest Rate
Question 7: Which one of the following sentences is correct regarding your borrowing interest rate?
Answer Options:
- The borrowing interest rate will change with the market, and the system will notify you when it changes
- The borrowing interest rate will be determined at the time of borrowing, no changes afterwards
Binance Margin Quiz Answer 7: The borrowing interest rate will change with the market, and the system will notify you when it changes
Binance Margin Quiz Question 8: Repaying Debts
Question 8: In the event of liquidation, how to repay your debts?
Answer Options:
- Binance insurance funds will write off your debts
- You are required to repay the debts yourself
Binance Margin Quiz Answer 8: Binance insurance funds will write off your debts
Binance Margin Quiz Question 9: Pay Interest Fees
Question 9: How to pay the interest fee with BNB in cross margin?
Answer Options:
- Transfer BNB to cross margin account and repay manually
- Repay with the loan
Binance Margin Quiz Answer 9: Transfer BNB to cross margin account and repay manually
Binance Margin Quiz Question 10: Margin Call Notifications
Question 10: When you receive a margin call notification, what should you do?
Answer Options:
- Borrow more funds to hedge the risk
- Reduce your position to repay the debt or add more collateral into the margin account
- Do nothing
Binance Margin Quiz Answer 10: Reduce your position to repay the debt or add more collateral into the margin account
Binance Margin Quiz Question 11: Forced Liquidation
Question 11: When trading on Margin, a forced liquidation occurs when the margin risk ratio (total assets/total debts) reaches the liquidation risk ratio. Users are charged a “Liquidation Clearance Fee” in the event of forced liquidation. Which of the following contains the correct description for Liquidation Clearance Fees?
Answer Options:
- The Liquidation Clearance Fee is a fixed value for each liquidation.
- When the position is forcedly liquidated, the user will only be charged with commission fees of liquidation orders and does not need to pay additional “Liquidation Clearance Fees”.
- When the position is forcedly liquidated, a Liquidation Clearance Fee will be charged according to the amount of the assets being liquidated. The system may use all the remaining assets in the margin wallet to complete the liquidation.
Binance Margin Quiz Answer 11: When the position is forcedly liquidated, a Liquidation Clearance Fee will be charged according to the amount of the assets being liquidated. The system may use all the remaining assets in the margin wallet to complete the liquidation.
Binance Margin Quiz Question 12: Margin Risk Ratio
When the margin risk ratio (total assets/total debts) of your margin wallet reaches liquidation risk ratio, which one of the following best describes what will happen?
Answer Options:
- When your margin wallet is under liquidation, you will not be able to trade with this wallet
- The system will automatically sell your assets to repay your debts
- You will be charged a liquidation clearance fee according to the amount of assets being liquidated
- All of the above
Binance Margin Quiz Answer 12: All of the above
What is Binance?
Binance is a leading cryptocurrency exchange founded in 2017 in Hong Kong. The platform allows users to buy, trade, and hold over 350 different cryptocurrencies, including Bitcoin, Ethereum, and various altcoins. It has become extremely popular due to its speed, low transaction fees (less than 0.10%), and high liquidity, which makes it easy to find buyers and sellers for various currencies.
Binance has over 120 million registered users and a 24-hour trading volume of $38 billion. Although the exchange suffered a major hack in 2019, resulting in the loss of 7,000 Bitcoins worth $40 million, Binance has since strengthened its security and promised to recover all losses through its insurance fund.
What is Binance Margin Trading?
Binance Margin trading is a method of trading using funds provided by a third party. Compared to regular trading accounts, margin accounts allow traders to access greater capital to trade. Allowing traders to leverage their positions and amplify their trading results.
In traditional markets, the borrowed funds are provided by a broker. In cryptocurrency trading, other traders often provide funds that earn interest based on market demand for margin funds.
Why do you have to Complete the Binance Margin Quiz to Trade?
Before you can trade margin on Binance, you must complete the Binance Margin Quiz. The Binance Margin quiz aims to ensure that users understand the risks associated with margin trading. The quiz is designed to test your knowledge of margin trading on the exchange and covers various topics, including risk management and order types.
Margin trading is considered high risk, as it involves borrowing funds from a broker or another party to the trade, which can increase both profits and risks. By requiring users to pass the quiz, Binance aims to promote responsible trading practices and minimize the risks for its users.
Binance Margin Trading Fees
Binance margin trading is known for low crypto spot trading fees and minimal daily margin interest fees. For spot trades, every new trader on Binance is charged 0.1% per trade, and Binance charges no fee for asset deposits, but fees may apply for withdrawals. Binance’s margin account interest rate is charged and calculated hourly.
You can visit the Binance fee schedule page for detailed information on Binance’s margin trading fees.
Conclusion
Hopefully, you have now completed the margin quiz using the above Binance Margin Quiz answers and will be able to start trading with margin on the Binance exchange.
Please note that margin trading cryptocurrency isn’t for beginners and is very risky and should be used cautiously.
