What Does the Model Code Say Concerning Repos and Stock-Lending

question 382

Multiple Choice

What does the Model Code say concerning repos and stock-lending?

• A) Legal documentation must be put in place as soon as possible after transaction.
• B) All market participants should use the Modified Previous Business Day Convention.
• C) The exact maturity (end) dates for transactions must be agreed as soon as possible after a transaction.
• D) All market participants should use the Modified Following Business Day Convention.

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Definitions:

Credit Risk

The risk that a borrower will default on any type of debt by failing to make required payments.

Operating Cash Flow

Cash generated from the core business operations of a company, excluding financing and investing activities.

Cash Outlays

Refers to the actual disbursement of cash, including expenses, investments, and any other payments made by a business or an individual.

Dividend Policy

The strategy a company uses to decide how much it will pay out to shareholders in dividends.