For What Range of Losses Is the Equity Tranche of ITraxx

question 4

Multiple Choice

For what range of losses is the equity tranche of iTraxx (or CDX NA IG) responsible?

• A) 0 to 10%
• B) 0 to 7%
• C) 0 to 6%
• D) 0 to 3%

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Definitions:

Innocent Misrepresentation

A false statement made without knowledge of its falsity, leading another to enter into a contract they otherwise might not have.

Remedies

Legal means through which a right is enforced or a violation of a right is compensated.

Fraud

Intentional deception made for personal gain or to damage another individual.

Punitive Damages

Punitive damages are monetary compensations awarded in lawsuits, over and above the actual damages, intended to punish the defendant for egregious misconduct and deter future similar acts.