- CFA Exams
- CFA Level I Exam
- Study Session 13. Fixed Income (2)
- Reading 36. Credit Default Swaps
- Subject 3. Basics of valuation and pricing
CFA Practice Question
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.
Correct Answer: B
She would hope to unwind her position later by purchasing it at a lower price.
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