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Basic Question 2 of 9

The cheapest-to-deliver option benefits the ______.

A. protection buyer.
B. protection seller.
C. loan borrower.

User Contributed Comments 3

User Comment
gregsob2 really? in what sense? isnt it the protection seller who delivers the bond?
droko the buyer delivers.
CFAJ the protection seller either buys the defaulted bonds from the buyer of CDS or pays the difference between cheapest to deliver and notional amount
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I used your notes and passed ... highly recommended!
Lauren

Lauren

Learning Outcome Statements

describe credit default swaps (CDS), single-name and index CDS, and the parameters that define a given CDS product;

CFA® 2025 Level II Curriculum, Volume 4, Module 30.