At a Given Point in Time, the Price of a Credit

question 55

Multiple Choice

At a given point in time, the price of a credit default swap contract should be ________ related to the default risk of the securities covered by the contract. For a given set of securities that are covered by a credit default swap, the price of the contract should be _______ related to the default risk as it changes over time.

• A)​p ositively; positively
• B)positively; inversely
• C)Inversely; positively
• D)inversely; inversely

Recognize the role of associative learning in behavior modification.

Understand generalization and discrimination within the context of conditioning.

Appreciate the cognitive aspects involved in learning processes.

Analyze the role of environmental and contextual factors in learning.

---

Definitions:

Preferred Stock

A type of equity security that has a priority claim on a company's assets and earnings before common stock, usually with fixed dividends and no voting rights.

Paid-In Capital Excess

The amount of equity a company generates that is above the par value of its shares, often arising from the initial sale of its stock.

Par Value

A nominal value assigned to a security or stock, often used in accounting to represent the standard or face value.

Shares

Represent units of ownership interest in a corporation or financial asset, providing an equitable distribution of any profits, if declared, in the form of dividends.