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Which of the following is a key advantage of exchange-based derivatives for hedging?
A
Exchange-based derivatives can be traded without incurring transaction costs.
B
Exchange-based derivatives offer flexibility in terms of customizing the hedging instrument to match the position that the firm wants to hedge.
C
Exchange-based derivatives are typically more effective in reducing basis risk in a hedging transaction compared to bilateral OTC derivatives.
D
Exchange-based derivatives can minimize counterparty credit risk through the use of netting and margin requirements.
