- CFA Exams
- CFA Level I Exam
- Study Session 13. Fixed Income (2)
- Reading 36. Credit Default Swaps
- Subject 1. Basic definitions and concepts
CFA Practice Question
Buying a CDS is similar to the following EXCEPT FOR:
A. buying put options on a corporate's bond.
B. buying insurance contracts on a corporation's bond.
C. buying call options on a corporate's bond.
Explanation: A: the protection buyer is protected against the losses resulting from a decline in the value of the bond as a result of a credit event.
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