As Regards Controls, Which of the Following Best Practices for Counterparty

question 54

Multiple Choice

As regards controls, which of the following best practices for counterparty identification is incorrect?

• A) Amendments to customer standing data should be subject to 4 eyes control and only changed if the appropriately authorized documentation is provided.
• B) The set up of settlement instructions and the confirmation method should be fixed when setting the first transaction.
• C) No trading should be done without first identifying and setting up the counterparty.
• D) Counterparty identification and setup of settlement instructions should be completed in less than 2 working days.

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Definitions:

Income Tax Rate

The percentage at which an individual or corporation is taxed on their income.

Interest Expense

The cost incurred by an entity for borrowed funds, typically reported on the income statement as a non-operating expense.

Net Profit Margin Percentage

A financial metric expressing the percentage of revenue remaining after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from a company's total revenue.

Gross Margin

The difference between sales revenue and the cost of goods sold, indicating the profitability of a company's core activity.