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Part I
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Clearing and Settlement
Clearing and Settlement
Easy
In the context of centrally cleared derivatives, novation refers to the process where:
A
The CCP interposes itself between the two original counterparties, becoming the buyer to every seller and the seller to every buyer
B
The original trade is cancelled and replaced with a new trade at updated market prices
C
Both counterparties post initial margin to a third-party custodian
D
The clearinghouse transfers the trade to a different exchange for settlement
Select an answer to continue
Tags
#novation
#ccp
#central-clearing
#derivatives-markets
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FRM Part I — Clearing and Settlement Practice Question | AcadiFi | AcadiFi