Question

What is the primary characteristic of privately negotiated customised and OTC-traded financial derivatives?

a.

They have low exposure to operational risks.

b.

They are secondary market-oriented instruments.

c.

They are subject to greater exposure of operational risks, counterparty risks, and liquidity risks.

d.

They have little scope in mobilizing fresh capital.

Answer: (c).They are subject to greater exposure of operational risks, counterparty risks, and liquidity risks. Explanation:Privately negotiated customised and OTC-traded financial derivatives are subject to greater exposure of operational risks, counterparty risks, and liquidity risks.

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Q. What is the primary characteristic of privately negotiated customised and OTC-traded financial derivatives?

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