Which of the Following Involves Most Credit Risk

question 3

Multiple Choice

Which of the following involves most credit risk

• A) Exchange trading
• B) OTC trading with a central clearing party being used
• C) OTC trading with bilateral clearing and collateral being posted
• D) OTC trading with bilateral clearing and no collateral being posted

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Definitions:

Higher Costs

Increased expenses or financial outlays in comparison to a baseline or expected level, affecting profitability.

Positive Externalities

Benefits that occur as a result of an economic activity which positively affect individuals or entities not directly involved in the activity.

Locate

The act of identifying or establishing the position or place of something, often relevant in logistics, real estate, and data analysis.

Network Design Decisions

Choices made regarding the layout and structure of a network, including the selection of nodes, connections, and the allocation of resources.