The Model Code Recommends That When Banks Accept a Stop-Loss

question 39

Multiple Choice

The Model Code recommends that when banks accept a stop-loss order

• A) Management must ensure ongoing lines of communication are in place between the parties.
• B) Management must report to the central bank.
• C) Management allows only experienced dealers to take such orders.
• D) Bank staff must secure the approval of the counterpartqs management to accept such orders.

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Definitions:

Vertical Specialization

The structuring of an organization’s workforce based on hierarchical levels of authority and specialized functions or tasks.

Impersonal Coordination

The organization and management of tasks or activities without personal involvement, often through systems or standardized procedures.

Standardization

The method of establishing and advancing technological norms to guarantee uniformity and interoperability across processes, products, or services.

Lines of Authority

The clear and formal hierarchical structure within an organization that dictates who has control over decisions and resources.