CDMSE Practice Test

1Single Choice

Which statement best describes a primary purpose of collateral management in financial markets?

A.To guarantee that every transaction settles regardless of counterparty performance
B.To mitigate counterparty credit exposure by transferring assets or other forms of collateral between parties
C.To determine the legal ownership of securities held in a central securities depository
D.To replace all margin calculations with a fixed percentage for every transaction

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