Under Which Circumstances Are Banks Allowed to Park Positions with a Counterparty

question 115

Multiple Choice

Under which circumstances are banks allowed to park positions with a counterparty?:

• A) It is forbidden to park positions.
• B) In conditions of exceptional volatility.
• C) If the two counterparties agree.
• D) If approved by senior management.

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Definitions:

Simple Interest

Interest calculated only on the initial principal amount of an investment or loan, without compounding.

Third Payment

The payment that occurs as the third in a series or schedule of payments.

Borrowed

Refers to money obtained with an agreement to return it, usually with interest.

Lottery

A form of gambling involving the drawing of numbers at random for a prize.