You and a Dealer at Another Bank Have an Informal

question 603

Multiple Choice

You and a dealer at another bank have an informal bilateral reciprocal arrangement to quote each other two-way prices. During periods of high volatility, the other dealer refuses to quote to you. The Model Code states that

• A) The other dealer should act with honour, honesty and integrity.
• B) It is a purely matter for your two institutions.
• C) Such arrangements are not in any way enforceable or binding.
• D) All of the above.

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Definitions:

High-Unit Cost

The condition of having a high cost per unit of product, often due to expensive inputs or inefficient production.

FIFO

First-In, First-Out, an inventory valuation method where goods purchased or manufactured first are sold or used first.

LIFO

Last In, First Out, an inventory valuation method where the most recently produced items are recorded as sold first.

Bonus Rate

An additional rate of interest applied over the standard rate in certain savings accounts or investments as an incentive.