Deliverable Forex Derivatives
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Questions and Answers

What did the U.S. Treasury Department exempt from key Dodd–Frank regulations?

  • Interest rate swaps
  • Deliverable forex derivatives (correct)
  • Central clearing
  • Platform trading
  • What was the basis of the exemption of forex derivatives from key Dodd–Frank regulations?

  • Minimal impact on systemic risk
  • Small amount of counterparty risk (correct)
  • Low market volatility
  • High liquidity
  • What did the author of the text suggest regarding the counterparty risk of deliverable forex derivatives?

  • It is negligible compared to other derivatives
  • It is minimal and manageable
  • It is not as small as suggested (correct)
  • It is not significant in the forex market
  • What aspects of deliverable forex derivatives remain lightly regulated?

    <p>All of the above</p> Signup and view all the answers

    What did the U.S. Treasury Department exempt forex derivatives from involving margin, central clearing, and platform trading?

    <p>Dodd–Frank regulations</p> Signup and view all the answers

    What significant steps have been made in the United States and Japan toward pretrade price transparency and competitive swap trading?

    <p>Migration of OTC trade toward exchanges and MTFs</p> Signup and view all the answers

    Where are more than two-thirds of new trades in standardized interest rate swap and CDS index trading in the United States conducted?

    <p>MTFs</p> Signup and view all the answers

    How do buy-side firms typically obtain their positions on MTFs?

    <p>Multiple dealers responding to requests for quotes (RFQ)</p> Signup and view all the answers

    What is the result of interdealer trade conducted on MTFs that use a central limit order book?

    <p>A 'two-tiered' market</p> Signup and view all the answers

    What is a shortcoming of the reforms in terms of improving competition and lowering trading costs to buy-side market participants?

    <p>Not bringing all wholesale market participants into the reforms</p> Signup and view all the answers

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