Which of the following is NOT a means whereby the default risk is controlled in futures trading?
A) the clearing corporation acting as the counterparty to all contracts
B) imposing daily limits on price movements
C) only low-risk participants are allowed to trade
D) implementing daily settlement and margin requirements

Question

Quizplus · Accepted Answer

The default risk in futures trading is managed through mechanisms like the clearing corporation acting as the counterparty to all contracts, imposing daily limits on price movements, and implementing daily settlement and margin requirements. The statement that only low-risk participants are allowed to trade does not accurately describe a method used to control default risk in futures trading. Instead, futures markets are open to a wide range of participants, and risk management is achieved through the other methods mentioned.

Which of the Following Is NOT a Means Whereby the Default