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Which of the following statements best describes collateral?

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Which of the following statements best describes collateral?

A.

Liquid assets pledged by one or both counterparties to the other to reduce credit risk

B.

Deposits placed by a commercial bank with a central bank to fulfill reserve asset ratios

C.

Any deposit placed by an institution with another institution of a lower credit rating

D.

Any cross border payment of currency

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  • Update on: Nov 15, 2026
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TESTED 15 Nov 2026