Why should I choose AnalystNotes?
AnalystNotes specializes in helping candidates pass. Period.
Basic Question 4 of 5
There are two series of outstanding senior bonds issued by a company, which has filed for bankruptcy. Bond A trades at 20% of par, and Bond B trades at 30% of par. Investor X owns $10 million of bond A and investor Y owns $10 million of bond B. They both own $10 million of CDS protection.
B. 25%.
C. 30%.
What is the recovery rate for the CDS contract of X's?
A. 20%.
B. 25%.
C. 30%.
User Contributed Comments 0
You need to log in first to add your comment.
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
explain the principles underlying and factors that influence the market's pricing of CDS;
CFA® 2025 Level II Curriculum, Volume 4, Module 30.