- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 30. Credit Default Swaps
- Subject 3. Basics of Valuation and Pricing
CFA Practice Question
Which factor determines the shape of credit curve?
B. loss given default.
C. hazard rate.
A. probability of default.
B. loss given default.
C. hazard rate.
Correct Answer: C
For example, if the hazard rate is greater in later years, reflecting that the reference entity debt is risker in the long-term, the credit curve will be upward-sloping.
User Contributed Comments 0
You need to log in first to add your comment.