A
Acadi
Fi
Courses
Knowledge Hub
Community
Practice
Pricing
About
Search
⌘K
Question Bank
/
FRM
/
Part I
/
Financial Markets and Products
Financial Markets and Products
Easy
Which of the following best describes the role of a central counterparty (CCP) in derivatives markets?
A
The CCP interposes itself between the buyer and seller, becoming the counterparty to both sides and reducing bilateral counterparty credit risk
B
The CCP acts as a broker matching buy and sell orders but bears no counterparty risk
C
The CCP sets interest rates used in derivatives pricing
D
The CCP only clears exchange-traded products and cannot clear OTC derivatives
Select an answer to continue
Tags
#ccp
#central-clearing
#counterparty-risk
#derivatives-infrastructure
More Financial Markets and Products questions
Start full Part I quiz