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

Question

Quizplus · Accepted Answer

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.

Which of the Following Best Describes Central Clearing Parties