Question
What are the Over the counter (OTC) derivatives
considered risky?Solution
"Over-the-counter" can be used to refer to stocks that trade via a dealer network as opposed to on a centralized exchange (like NSE, MCX, etc.). Certain securities (like unlisted shares) and derivatives (like forwards contracts) are traded by broker-dealers who negotiate directly with one another. Unlike Futures and Options contract which are traded on exchange involving a clearing corporation between Buyer and seller, Swaps & Forward Contracts are traded OTC.
More Financial Management Questions
- A series is given with one term missing. Choose the correct alternatives from the given ones that will complete the series.
57, 59, 56, 61, 54, ___ - Which letter-cluster will replace the question mark (?) in the following series?
NPQR, OORQ, PNSP, ____, RLUN - Which letter and number cluster will replace the question mark (?) to complete the given series?
LT6, KU12, IW24, FZ48, ____ - Which letter-cluster will replace the question mark (?) in the following series?
RGV, UME, ?, AYW, DEF - Select the number from among the given options that can replace the question mark (?) in the following series.
17, 18, 22, 31, 47, ___
