What Is Meant by Vertical Offset

question 47

Multiple Choice

What is meant by vertical offset?

• A) The deduction of capital charges because long and short positions in the same maturity bucket but in different instruments more than offset each other.
• B) The assignment of additional capital charges because long and short positions in the same maturity bucket but in different instruments cannot perfectly offset each other.
• C) The deduction of capital charges because long and short positions in different maturity buckets but in the same instrument more than offset each other.
• D) The assignment of additional capital charges because long and short positions in different maturity buckets but in the same instrument cannot perfectly offset each other.

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Definitions:

Worthless Cheque

A cheque that cannot be processed because the account it is drawn on does not have sufficient funds.

Innocent Purchaser

An individual who buys property without knowledge of any existing claims, liens, or encumbrances against it.

Consideration

The worth, including currency, services, or items, that is traded between entities in an agreement.

Contract Void

A contract void is a contract that is deemed legally nonexistent and unenforceable from the outset, due to illegality or other serious defects.