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When you buy a property or an asset, it is very important that its value is derived from its return and a security derivative is found out. However, it is a very difficult process that is backed as well as standardised by the clearance of the property. Without any central location, the custom instruments like swamps and forwards are created by the dealers. This dealer market that does not have any central location, is known as the over the counter market. Exposing the default risk, the unregulated market has a contract with counter parties.
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