Economics · Financial Markets - Derivatives
Which of the following conclusions accurately describe the distinctions between exchange-traded and over-the-counter (OTC) derivative markets? 1. Exchange-traded markets utilize highly standardized contracts, which enhances transparency but reduces customization flexibility. 2. OTC markets allow customized terms tailored to specific risk profiles, though they generally carry higher counterparty credit risk. 3. Regulatory oversight on OTC derivatives was significantly enhanced globally following the 2008 financial crisis. Select the correct answer using the codes given below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 11, 2 and 3✓
- 21 and 3 only
- 32 and 3 only
- 41 and 2 only
Correct answer
1, 2 and 3
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