ACI
3I0-013 · Question #124
Bank A has a large number of forward OTC trades with Bank B. What risks will be reduced by concluding a netting agreement?
The correct answer is D. Replacement risk and basis risk. See the full explanation below for the reasoning.
Question
Bank A has a large number of forward OTC trades with Bank B. What risks will be reduced by concluding a netting agreement?
Options
- AMarket-price-risk and replacement risk
- BMarket-price-risk and delivery risk
- CReplacement risk and delivery risk
- DReplacement risk and basis risk
How the community answered
(65 responses)- A5% (3)
- B8% (5)
- C3% (2)
- D85% (55)
Community Discussion
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