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a) Your business colleague tells you they've just completed a transaction for a financial derivative, and makes the following comments to you: The financial exposure

a) Your business colleague tells you they've just completed a transaction for a financial derivative, and makes the following comments to you:

"The financial exposure of the deal we just made was enormous. I am feeling somewhat uneasy since we've potentially taken on a large amount of the default risk in a market where there is relative little regulatory oversight."

Based on you colleague's comments. determine if this trade was made through an organized exchange or on the OTC market. Provide 3 reasons to support your answer.

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