- 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
The value of a CDS to the protection buyer is:
B. Expected PV of fixed leg - expected PV of contingent leg.
C. Zero.
A. Expected PV of contingent leg - expected PV of fixed leg.
B. Expected PV of fixed leg - expected PV of contingent leg.
C. Zero.
Correct Answer: A
For new CDS its value is zero.
User Contributed Comments 4
| User | Comment |
|---|---|
| rodney176 | So is the answer A or C ? The value is zero |
| merc5559 | problem doesn't say it's a new CDS rodney |
| ashish100 | yeah rodney |
| sjne09 | yeah rodney |