Derivatives - Derivatives Section 1

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6. Which of the following least likely describes over-the-counter (OTC) derivatives relative to exchange-traded derivatives? OTC derivatives are:

  • Option : B
  • Explanation : Over-the-counter derivatives are customized and less transparent relative to exchange traded derivatives. There is a tendency to think that OTC market is less liquid relative to the exchange market, but this is not necessarily true
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8. As compared to exchange-traded derivatives, over-the-counter derivatives are more likely to have:

  • Option : B
  • Explanation : Customization of contract terms is a characteristic of over-the-counter derivatives
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