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Basic Question 4 of 9
In a CDS, the protection seller essentially takes the default risk of lending:
B. directly to the reference entity.
C. to nobody. That is, the seller is exposed to no default risk.
A. directly to the protection buyer.
B. directly to the reference entity.
C. to nobody. That is, the seller is exposed to no default risk.
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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
describe credit default swaps (CDS), single-name and index CDS, and the parameters that define a given CDS product;
CFA® 2025 Level II Curriculum, Volume 4, Module 30.