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86
The reference entity in a credit default swap is
A.The buyer of protection
B.The seller of protection
C.The company or country whose default is being insured against
D.None of the above
A.The buyer of protection
B.The seller of protection
C.The company or country whose default is being insured against
D.None of the above
Answer: C
In a credit default swap the buyer of protection pays a CDS spread to the seller of protection and the protection seller has to make a payoff if there is a default by the reference entity.
In a credit default swap the buyer of protection pays a CDS spread to the seller of protection and the protection seller has to make a payoff if there is a default by the reference entity.
Flashcard info:
Author: CoboCards-User
Main topic: Finance & Investment
Topic: Derivatives
Published: 27.10.2015