Canadian Securities Course (CSC) Practice Exam

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Study for the Canadian Securities Course Exam with our comprehensive practice test. Explore flashcards and multiple-choice questions, each with detailed hints and explanations. Prepare for your CSC exam with confidence!

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What characteristic is unique to exchange-traded derivatives compared to OTC-traded derivatives?

Customizable
Delivery usually takes place
Heavily regulated
No 3rd party guarantor

The correct answer is: Heavily regulated

Exchange-traded derivatives are unique because they are heavily regulated, meaning that they are subject to strict rules and oversight by regulatory agencies such as the Securities and Exchange Commission (SEC) in the United States. The other options are incorrect because they do not apply to all exchange-traded derivatives. Option A is incorrect because while some exchange-traded derivatives may be customizable, not all are. Option B is incorrect because delivery only takes place for physically settled derivatives, while for cash-settled derivatives, no physical delivery is necessary. Option D is incorrect because many exchange-traded derivatives do have a third party guarantor, such as a clearinghouse. This helps to mitigate counterparty risk and ensure the integrity of the market. Therefore, C is the most correct answer.