ACI
3I0-012 · Question #205
You and a dealer at another bank have a verbal bilateral reciprocal arrangement to quote each other two-way prices. During periods of high volatility, the other dealer refuses to quote to you. What…
The correct answer is B. This is not in any way an enforceable or binding commitment. See the full explanation below for the reasoning.
Question
You and a dealer at another bank have a verbal bilateral reciprocal arrangement to quote each other two-way prices. During periods of high volatility, the other dealer refuses to quote to you. What does the Model Code say about this situation?
Options
- AThe other dealer is bound to reciprocate.
- BThis is not in any way an enforceable or binding commitment.
- CThe Model Code does not comment on dealing reciprocity.
- DIt is common market practice to suspend reciprocity in periods of high volatility.
How the community answered
(27 responses)- A15% (4)
- B78% (21)
- C4% (1)
- D4% (1)
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