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Rarecom is a specialist company that only trades derivatives on rare commodities. Rarecom and a handful of other firms, all of whom have large notional outstanding contracts with Rarecom, dominate the market for such derivatives. Rarecom management would like to mitigate its overall counterparty exposure, with the goal of reducing it to almost zero. Which of the following methods, if implemented, could best achieve this goal?
A
Ensuring that sufficient collateral is posted by counterparties.
B
Diversifying among counterparties.
C
Cross-product netting on a single counterparty basis.
D
Purchasing credit derivatives, such as credit default swaps.