Which of the Following Derivative Contract Features Does Not Reduce

question 30

Multiple Choice

Which of the following derivative contract features does not reduce counterparty risk?

• A)Flexible forward contracts
• B)Standardized exchange-listed contracts
• C)Requirements to post margin
• D)Requirement to trade via a clearinghouse

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Definitions:

Unfunded Mandates

Legal requirements or conditions for federal programs that are imposed by Congress on state and local governments without providing federal funding to cover the costs.

Home Rule

Home rule refers to the power granted to political subdivisions by the state to govern themselves with minimal state interference.

Unfunded Mandate

A regulation or policy imposed by a higher authority (such as the federal government) on lower government levels or the private sector, without providing corresponding funds for implementation.

Grant-in-Aid

Financial assistance given by one level of government to another, often from the federal government to state or local governments, for a specific purpose.