lExchange traded
lTraditionally exchanges have used the open-outcry system, but increasingly they are switching to electronic trading
lContracts are standard; there is virtually no credit risk
lOver-the-counter (OTC)
lA computer- and telephone-linked network of dealers at financial institutions, corporations, and fund managers
lContracts can be non-standard; there is some small amount of credit risk
Companies should focus on the main business they are in and take steps to minimize risks arising from interest rates, exchange rates, and other market variables
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