3. A central counterparty clear could mitigate the counterparty risk of financial institutions because

I. It decreases the total liability entities are exposed to.

II. It reduces the interconnectedness within financial markets.

III. It provides more transparency in the transaction and operational processes.

IV. It prevents uncollateralized positions.

A. I and II only; B. I, II and IV only; C. II and III only; D. I, II and III, and IV