What document should outline the procedures for correcting trade errors, including who should be informed of these errors?

The correct choice is the document that outlines the procedures for correcting trade errors. This type of document is critical because it establishes a formal process that the investment advisory firm will follow in the event a trade error occurs. It typically details the steps to be taken, the parties to be notified, and the timelines for addressing the error. By having written procedures, the firm ensures that there is consistency and clarity in how trade errors are handled, which helps mitigate potential losses and maintain client trust.

In contrast, while a Trade Error log serves as a record of errors that have occurred, it does not provide the procedural framework needed for correcting those errors. A Form ADV disclosure pertains to the broader disclosure requirements of an investment adviser but would not specifically focus on the internal corrective measures related to trade errors. Lastly, a document outlining how losses are calculated is also not directly relevant to addressing the procedural aspects of correcting trade errors; rather, it deals with the financial implications of those errors. Having a well-defined set of written procedures is crucial to ensure compliance and operational efficiency in managing trade errors.