ACI
3I0-013 · Question #215
What is the meaning of settlement (Herstatt) risk?
The correct answer is C. The risk that settlement arrangements will be made with the wrong counterparty. See the full explanation below for the reasoning.
Question
What is the meaning of settlement (Herstatt) risk?
Options
- AThe risk a payment order will not be processed due to a power failure in which the disaster
- BAny amount that is due to be received under a contract should be regarded as a settlement
- CThe risk that settlement arrangements will be made with the wrong counterparty
- DThe risk of aborting settlement procedures due to the unavailability of back office staff
How the community answered
(54 responses)- A6% (3)
- B7% (4)
- C85% (46)
- D2% (1)
Community Discussion
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