- 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
If the credit spread on the reference entity > coupon rate on a CDS, upfront premium will be paid by:
B. protection seller.
C. neither party.
A. protection buyer.
B. protection seller.
C. neither party.
Correct Answer: A
In this case the PV of protection leg > PV of premium leg.
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