Which of the Following Is an Advantage of a General

question 29

Multiple Choice

Which of the following is an advantage of a General Collateral Finance RP?

• A)The securities pledged in the first leg need not necessarily be the same to be returned.
• B)It can be settled on the books of the FICC which allows for netting of transactions.
• C)It entails lower transaction costs.
• D)It helps make RP market more liquid.
• E)All of the options are correct.

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Definitions:

Common Shares

Equity ownership units in a corporation, entitling holders to voting rights and dividends.

Share Capital

Share capital refers to the funds raised by a company through the issuance of shares, which represent ownership interests in the company.

IFRS

International Financial Reporting Standards, a set of accounting guidelines that provide the basis for financial reporting across many countries globally.

Noncumulative

Pertaining to dividends on preferred stock where missed dividends are not required to be paid back to shareholders in future payments.