Which of the Following Statements About Credit Default Swaps (CDS)

question 176

Multiple Choice

Which of the following statements about Credit Default Swaps (CDS) is correct?

• A) CDS are used to recover funds from defaulted swap counterparties.
• B) CDS provide protection against specified credit events to the party receiving the CDS premium payments.
• C) CDS provide protection against the default of the trade counterparty that buys the CDS.
• D) CDS provide compensation to the protection buyer, should a specified credit event occur to a third party entity.

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Definitions:

Open-book Management

A management approach where companies share financial and operational information with all employees to involve them in decision making.

Empower Employees

The process of giving staff members the authority, tools, and information they need to make decisions and contribute to the company's success.

Financial Reports

Official records that detail a company's financial performance over a specified period, including income statements, balance sheets, and cash flow statements.

Compressed Work-week

An alternative work schedule that allows employees to work their full required hours within fewer days per week, often resulting in longer daily hours but a shorter workweek.