The correct answer is d) All of the above.

Here's why:

a) Stock market is more liquid than OTC: This is true because the stock market has a larger number of participants and transactions, which increases liquidity.

b) Credit Risk is high in OTC whereas it is assumed by the stock exchange in the stock market: This is also true. In the OTC market, the parties are dealing directly with each other, so there's a higher risk that one party may default on their obligations. In the stock market, the exchange itself guarantees the completion of transactions, reducing credit risk.

c) OTC is a bilateral trade whereas stock exchange is multilateral: This is correct as well. OTC trades are conducted directly between two parties, without the oversight of an exchange. On the other hand, a stock exchange involves many parties and transactions are conducted through the exchange, making it a multilateral system.

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The correct answer is d) All of the above.

Here's why:

a) Stock market is more liquid than OTC: This is true because the stock market has a larger number of participants and transactions, which increases liquidity.

b) Credit Risk is high in OTC whereas it is assumed by the stock exchange in the stock market: This is also true. In the OTC market, the parties are dealing directly with each other, so there's a higher risk that one party may default on their obligations. In the stock market, the exchange itself guarantees the completion of transactions, reducing credit risk.

c) OTC is a bilateral trade whereas stock exchange is multilateral: This is correct as well. OTC trades are conducted directly between two parties, without the oversight of an exchange. On the other hand, a stock exchange involves many parties and transactions are conducted through the exchange, making it a multilateral system.

Knowee AI · Accepted Answer

The correct answer is d) All of the above.

Here's why:

a) Stock market is more liquid than OTC: This is true because the stock market has a larger number of participants and transactions, which increases liquidity.

b) Credit Risk is high in OTC whereas it is assumed by the stock exchange in the stock market: This is also true. In the OTC market, the parties are dealing directly with each other, so there's a higher risk that one party may default on their obligations. In the stock market, the exchange itself guarantees the completion of transactions, reducing credit risk.

c) OTC is a bilateral trade whereas stock exchange is multilateral: This is correct as well. OTC trades are conducted directly between two parties, without the oversight of an exchange. On the other hand, a stock exchange involves many parties and transactions are conducted through the exchange, making it a multilateral system.

The difference between the Stock Market and OTC Market is:*1 pointa) Stock market is more liquid than OTCb) Credit Risk is high in OTC whereas it is assumed by the stock exchange in the stock marketc) OTC is a bilateral trade whereas stock exchange is multilaterald) All of the above

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