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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 was very pleased with your notes and question bank. I especially like the mock exams because it helped to pull everything together.
Martin Rockenfeldt
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.