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Options
- A
Sale
- B
Buy
-
Self-Auction
Correct answer
- D
Arbitrage shortage
Why this is the answer
When a client sells shares but fails to deliver them, and another client of the same member buys the same shares, there may be no obligation at the clearing corporation level due to internal netting. To handle such cases, members can report internal shortages to the clearing corporation for Self-Auction. These are clubbed with other shortages, and a common auction is conducted.
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