Adequate Procedures and Controls Associated with Swap Transactions Should Exist

question 88

Multiple Choice

Adequate procedures and controls associated with swap transactions should exist to help minimize the risks inherent in transaction process. Example/s of these controls may include:

• A) A daily reconciliation of traders' positions should be performed
• B) To minimize market risk in hedge transactions: There should be independent sign-off procedures for hedging models All hedge strategies should be clearly defined All software and products should be secure and temper resistant
• C) All transactions should be authorized and affirmed
• D) All of these

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Definitions:

Inventory Increase

A rise in the quantity of products or materials that a company has available for sale or use, which is often an indicator of production levels or sales expectations.

Cash Discount

A reduction in the amount due by a buyer if payment is made within a specified period.

Credit Financing

The process of borrowing funds from lenders to finance business operations, purchases, or investments, typically through loans or issuing bonds.

Source Of Financing

Various means through which a business can obtain funds, including equity, debt, grants, and loans, to support its operations.