In Interbank Trading, If a Dealer Is Calling "Off" at the Same

question 599

Multiple Choice

In interbank trading, if a dealer is calling "off" at the same time as the broker is hitting a price:

• A) no transaction should be concluded and the broker should inform both counterparties accordingly
• B) a transaction should be concluded and the broker should inform both counterparties accordingly
• C) the dealer has the choice of either concluding the transaction or not
• D) the broker decides whether the transaction should be concluded or not

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Definitions:

Effective Interest Method

A technique used in accounting to allocate the interest expense or income of a bond over its lifetime based on the bond's carrying amount at each interest period.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.

Effective Interest Method

The effective interest method is a finance and accounting technique used to allocate loan or bond interest expense over the relevant period based on the loan's book value.