Risk in CDS Price Is Reflective of

question 8

Multiple Choice

Risk in CDS price is reflective of

• A) increase in probability of default
• B) increase in interest rates
• C) decrease in probability of default
• D) increase in recovery rates

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Definitions:

Depreciation

The accounting method of allocating the cost of a tangible asset over its useful life, reflecting wear and tear or obsolescence.

Maintenance

The routine tasks and repairs conducted to keep equipment, buildings, or machinery in working order and prevent its deterioration.

Utilities

Services provided to the public or households such as water, electricity, natural gas, sewage treatment, and telecommunications, often subject to government regulations and possibly eligible for tax deductions in certain business contexts.

Rental Expenses

Costs incurred in the operation, maintenance, and improvement of a property rented out, which can often be deducted for tax purposes.