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38
Which of the following best describes central clearing parties
A.Help market participants to value derivative transactions
B.Must be used for all OTC derivative transactions
C.Are used for futures transactions
D.Perform a similar function to exchange clearing houses
A.Help market participants to value derivative transactions
B.Must be used for all OTC derivative transactions
C.Are used for futures transactions
D.Perform a similar function to exchange clearing houses
Answer: D
CCPs do for the OTC market what exchange clearing houses do for the exchange-traded market. The correct answer is therefore D. CCPs must be used for most standard OTC derivatives transactions, but not for all derivatives transactions.
CCPs do for the OTC market what exchange clearing houses do for the exchange-traded market. The correct answer is therefore D. CCPs must be used for most standard OTC derivatives transactions, but not for all derivatives transactions.
Flashcard info:
Author: CoboCards-User
Main topic: Finance & Investment
Topic: Derivatives
Published: 27.10.2015