CFA Practice Question

There are 252 practice questions for this study session.

CFA Practice Question

The cheapest-to-deliver option benefits the ______.

A. protection buyer.
B. protection seller.
C. loan borrower.
Correct Answer: A

The protection buyer has the option to deliver the cheapest bond(s) upon default.

User Contributed Comments 3

User Comment
gregsob2 really? in what sense? isnt it the protection seller who delivers the bond?
droko the buyer delivers.
CFAJ the protection seller either buys the defaulted bonds from the buyer of CDS or pays the difference between cheapest to deliver and notional amount
You need to log in first to add your comment.