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Basic Question 0 of 7
An alternative to buying bonds for a financial institution to diversify its credit exposure would be to:
B. buy CDS protection.
C. buy the reference entity.
A. sell CDS protection.
B. buy CDS protection.
C. buy the reference entity.
User Contributed Comments 2
| User | Comment |
|---|---|
| schnurr | ‘To diversify its credit exposure”. Wouldn’t buying cds protection diversify its exposure as well? |
| Logaritmus | @up: Buying CDS is taking simillar credit risks. |
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Andrea Schildbach
Learning Outcome Statements
compare the risk and return characteristics of different types of equity securities
CFA® 2025 Level I Curriculum, Volume 3, Module 4.