Lawsuits about derivatives to major corporations are most likely to involve which of the following issues?
A. The type of derivative.
B. Broker size
C. Breach offiduciary duty.
D. Enforceability of contract
Answer:D
Most lawsuits involving derivatives are the result of the enforceability of the provisions of the derivatives contract. Master netting agreements have been used effectively to reduce the occurrence of contract disputes, reducing both legal and credit risk. These contracts contains carefully-formulated, standardized language that minimizes the chances of mistakes or misunderstandings.