The Reference Entity in a Credit Default Swap Is

question 18

Multiple Choice

The reference entity in a credit default swap is

• A)The buyer of protection
• B)The seller of protection
• C)The company or country whose default is being insured against
• D)None of the above

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Definitions:

Beta

A measure of a stock's volatility in relation to the overall market; a beta greater than 1 indicates higher volatility, and less than 1 indicates lower volatility.

Standard Deviation

A measure of the dispersion or variation in a distribution or set of data, indicating how much individual values differ from the mean.

Coefficient of Variation

A statistical measure of the dispersion of data points in a data series around the mean, expressed as a percentage.

Expected Returns

The anticipated amount of profit or loss an investment is projected to generate.