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3I0-012 · Question #722

Market participants should, where activity justifies it, aim to reduce settlement and related credit risk on currency transactions by:

The correct answer is C. Establishing legally binding bilateral netting agreements with counterparties or participating in a multilateral. See the full explanation below for the reasoning.

Question

Market participants should, where activity justifies it, aim to reduce settlement and related credit risk on currency transactions by:

Options

  • AEstablishing realistic daylight limits for counterparties.
  • BMonitoring all payments to counterparties who are known to be experiencing difficulties.
  • CEstablishing legally binding bilateral netting agreements with counterparties or participating in a multilateral
  • DSeeking pre-payment.

How the community answered

(18 responses)
  • A
    6% (1)
  • B
    11% (2)
  • C
    78% (14)
  • D
    6% (1)

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