All of the following are cited by Warren Buffet as problems with derivatives not traded on exchanges EXCEPT
A) they are thinly traded which makes it difficult to determine their value.
B) firms do not set aside reserves against potential losses.
C) they involve substantial counterparty risk.
D) they were not flexible enough due to lack of standardization.

Question

Quizplus · Accepted Answer

Warren Buffet did not identify lack of flexibility due to lack of standardization as a problem with derivatives not traded on exchanges. He did, however, cite the other three options as problems with such derivatives.

All of the Following Are Cited by Warren Buffet as Problems