Explain the role of the clearing houses on futures exchanges how clearing ho...
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Role of clearing house on future exchange = a clearing house is a financial institution fromed to facilities the exchange of payment, security, or derivative transaction.The clearing huose stands between two clearing firm.Clearing house purpose to reduce the risk of member firm failing to honor its trade settlement obligation.Clearing house reduce credit risk1 critical role play by clearing house the risk that a central counterparty bears and the tools applied to mitigate those risk.2 central counterparty bears most of the credit risk of the buyers and sellers when clearing and setling market transaction.
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