Since futures contracts are traded on an exchange, the exchange will always take the "other side" of the transaction in terms of accepting the credit risk.

Name: Since futures contracts are traded on an exchange, the exchange will always take the "other side" of the transaction in terms of accepting the credit risk.
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Question

Quizplus · Accepted Answer

The exchange acts as an intermediary and clearinghouse, ensuring that both parties fulfill their obligations, thus mitigating credit risk.

Since Futures Contracts Are Traded on an Exchange, the Exchange