GARP Financial Risk and Regulation (FRR) Series 2016-FRR Question # 38 Topic 4 Discussion

GARP Financial Risk and Regulation (FRR) Series 2016-FRR Question # 38 Topic 4 Discussion

2016-FRR Exam Topic 4 Question 38 Discussion:
Question #: 38
Topic #: 4

Financial regulators in a European country are considering banning trading in highly complex derivative instruments that are not settled through a centralized clearinghouse. This ban can result in:

I. The value of the country's currency dropping

II. Counterparties involved in trading of these derivative instruments failing to fulfill their obligations

III. The business model relying on these instruments failing

IV. Certain activities becoming illegal


A.

I, II


B.

II, III


C.

I, IV


D.

II, III, IV


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