CFA Practice Question

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CFA Practice Question

The value of a CDS to the protection buyer is:

A. Expected PV of contingent leg - expected PV of fixed leg.
B. Expected PV of fixed leg - expected PV of contingent leg.
C. Zero.
Correct Answer: A

For new CDS its value is zero.

User Contributed Comments 4

User Comment
rodney176 So is the answer A or C ? The value is zero
merc5559 problem doesn't say it's a new CDS rodney
ashish100 yeah rodney
sjne09 yeah rodney
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