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4. Which of the following is (are) the disadvantage(s) of CCP? 1. CCP cannot eliminate counterparty risk. II. Institutions become lack incentives to monitor each
4. Which of the following is (are) the disadvantage(s) of CCP? 1. CCP cannot eliminate counterparty risk. II. Institutions become lack incentives to monitor each other's credit quality and act inappropriately because CCP is taking all the risk. III. Firms may selectively pass the less risky products to CCPs rather than the riskier ones. IV. CCP might increase systemic risk. A. I and II only; B. I, II and IV only; C. II and III only: D. I, II and III, and IV
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