Where only the net credit or debit position of each participant vis-à-vis all other participants is calculated is known as ________.
A) multilateral netting
B) principal-agent netting
C) moral hazard netting
D) credit risk netting

Question

Quizplus · Accepted Answer

Multilateral netting involves calculating the net credit or debit position of each participant vis-à-vis all other participants in a transaction. This helps to reduce settlement risks and streamline the settlement process. Principal-agent netting involves netting transactions between a principal and its agent, while moral hazard netting involves netting transactions to reduce moral hazard risks. Credit risk netting involves reducing credit risks by offsetting or balancing the credit risk exposures of different parties in a transaction.

Where Only the Net Credit or Debit Position of Each