Question: When two entities transact with one another, credit risk is allowed till a certain level of offsetting. Beyond that predetermined offset level, each entity will

When two entities transact with one another, credit risk is allowed till a certain level of offsetting. Beyond that predetermined offset level, each entity will have to provide collateral to one another to address that exposure. For high investment grade entities you would:

Lower levels of offsetting with lower amounts of collateral

Allow lower levels of offsetting

Allow higher levels of offsetting with higher amounts of collateral

Allow higher levels of offsetting

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