Financial Risk Manager Part 2
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Q-76. What are the benefits of novation?
A
Allows both party to walk away from the contract in case of default.
B
A bilateral contract specifying that upon default, the non-defaulting party nets gains and losses with the defaulting counterparty to a single payment for all covered transactions
C
Financial market contracts can be terminated upon an event of default prior to the bankruptcy process.
D
Obligations are amalgamated with others