- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 30. Credit Default Swaps
- Subject 1. Basic Definitions and Concepts
CFA Practice Question
In a CDS, the protection seller essentially takes the default risk of lending:
B. directly to the reference entity.
C. to nobody. That is, the seller is exposed to no default risk.
A. directly to the protection buyer.
B. directly to the reference entity.
C. to nobody. That is, the seller is exposed to no default risk.
Correct Answer: B
However, the seller does not need to fund the loan.
User Contributed Comments 0
You need to log in first to add your comment.