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Basic Question 0 of 6

An alternative to buying bonds for a financial institution to diversify its credit exposure would be to:

A. sell CDS protection.
B. buy CDS protection.
C. buy the reference entity.
Check Answer Next Q Print

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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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

Tamara Schultz

Learning Outcome Statements

evaluate practices, policies, and conduct relative to the CFA Institute Code of Ethics and Standards of Professional Conduct;

explain how the practices, policies, and conduct do or do not violate the CFA Institute Code of Ethics and Standards of Professional Conduct.

CFA® 2025 Level II Curriculum, Volume 6, Module 45.