ACI
3I0-013 · Question #183
What are the consequences for credit risk when a collateral agreement is added to a netting agreement?
The correct answer is D. A collateral agreement can reduce the replacement risk. See the full explanation below for the reasoning.
Question
What are the consequences for credit risk when a collateral agreement is added to a netting agreement?
Options
- AA collateral agreement eliminates the future replacement risk
- BA collateral agreement can reduce market risk
- CA collateral agreement can reduce operational risk
- DA collateral agreement can reduce the replacement risk
How the community answered
(48 responses)- A8% (4)
- B4% (2)
- C4% (2)
- D83% (40)
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