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Basic Question 1 of 9
If an investor believes a reference entity's credit quality will improve, she would:
B. sell protection now.
C. sell protection later.
A. buy protection now.
B. sell protection now.
C. sell protection later.
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I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
describe the use of CDS to manage credit exposures and to express views regarding changes in shape and/or level of the credit curve;
describe the use of CDS to take advantage of valuation disparities among separate markets, such as bonds, loans, equities, and equity-linked instruments.
CFA® 2026 Level II Curriculum, Volume 4, Module 30.