An FX forward outright has been dealt for a value date which is subsequently declared to be a bank holiday. According to the Model Code, the exchange rate for the deal:
A) should be adjusted to take account of the change in value date
B) cannot be adjusted if one of the counterparties wishes to adjust the rate but the other wishes to keep the original rate
C) must be adjusted if one of the counterparties wishes to adjust the rate but the other wishes to keep the original rate
D) should be adjusted if the adjustment is for two days or longer but not if it is for only one day

Question

Quizplus · Accepted Answer

According to the Model Code, if a bank holiday is declared for the value date of an FX forward outright deal, the exchange rate for the deal should be adjusted to take account of the change in value date. Therefore, Choice A is the best answer. Choices B, C, and D are incorrect based on the Model Code guidance.

An FX Forward Outright Has Been Dealt for a Value