The Payment of Any Compensation for Loss Is Contingent on the Actual

question 66

Multiple Choice

The payment of any compensation for loss is contingent on the actual occurrence of a credit-related event under a

• A) Total return swap.
• B) Credit default swap.
• C) Collar.
• D) Forward rate agreement.
• E) Swap agreement.

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Definitions:

British Pounds

The currency of the United Kingdom, used as a medium of exchange within the country and sometimes beyond.

Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specific period.

Fair Hedge

A hedge that is accounted for at fair value, with changes in fair value recognized in earnings, to offset the exposure of an identified risk.