What Ought to Be Done in the Event a Trade

question 536

Multiple Choice

What ought to be done in the event a trade erroneously occurs at an off-market rate?

• A) By agreement between the two counterparties, the trade must be cancelled as soon as practically possible since a rate amendment is prohibited.
• B) By agreement between the two counterparts, the trade should, as soon as practically possible, either be cancelled or have its rate amended to an appropriate market rate.
• C) The off-market rate should be adjusted as soon as possible to the appropriate current market rate and a new authenticated SWIFT confirmation sent immediately to the counterparty.
• D) Nothing need be done, since once a trade is agreed to by the front office it is a binding agreement for both counterparties.

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Definitions:

Productive Activity

Actions or processes that result in the creation of goods or services which have economic value.

Manufacturing Sector

The segment of the economy that is engaged in the transformation of raw materials into finished products or goods.

Xenophobia

The fear and hatred of foreigners.

Cultural Relativism

A concept that suggests the values, knowledge, and behavior of people should be understood based on their own cultural context rather than judged against the criteria of another culture.