Which of the Following Is True of the Dodd-Frank Act

question 10

Multiple Choice

Which of the following is true of the Dodd-Frank Act with regard to derivatives?

• A) The Dodd-Frank statute will standardize derivatives traded on exchanges to decrease transparency.
• B) Derivatives must be routed through a subsidiary to ensure that companies using them post collateral.
• C) Banks can continue to trade derivatives in-house based on interest rates and foreign exchanges, and for purposes of hedging risk.
• D) Banks will have to spin off their riskier derivatives and trade them through a clearing house.

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Definitions:

Rational Function

A function that can be expressed as the quotient of two polynomials.

Domain

The set of all possible input values for which a function is defined.

Rational Function

A function represented by the quotient of two polynomials, where the denominator is not zero.

Rational Expression

A ratio of two polynomial expressions, with a non-zero denominator.