What is the risk of dealing through an agent with an unknown principal?
A) You may not be able to ensure that your firm can avoid suspicion of trading on non-public information or other allegations of bad or illegal trading practice.
B) You may not be able to net your exposure in an insolvency.
C) You may not be able to net your exposure for capital adequacy purposes.
D) All of the above.

Question

Quizplus · Accepted Answer

Dealing through an agent with an unknown principal carries multiple risks, including potential regulatory and legal issues related to trading on non-public information, difficulty in netting exposures in case of insolvency or for capital adequacy purposes. Therefore, all of the above options (A, B, and C) are best choices.

What Is the Risk of Dealing Through an Agent with an Unknown