Which of the Below Statements Is FALSE

question 18

Multiple Choice

Which of the below statements is FALSE?

• A) The reason why restructuring is so trouble-free is that a protection buyer benefits from the inclusion of restructuring as a credit event and feels that eliminating restructuring as a credit event will erode its credit protection.
• B) If the reference obligation is a loan and the protection buyer is the lender, a benefit is that the protection buyer receives a payment from the protection seller.
• C) If the reference obligation is a loan and the protection buyer is the lender, a benefit is that the accommodating restructuring fosters a relationship between the lender and its customer.
• D) As the credit derivatives market developed, market participants learned a great deal about how to better define credit events.

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Definitions:

Land Improvements

An asset account that records improvements made to land; such improvements have a limited life and are subject to depreciation (examples are a driveway or fences).

Limited Life

A term often used to describe the finite existence or duration of certain entities or agreements.

Installation Costs

The expenses associated with setting up equipment or machinery for use, which can include labor, materials, and other direct or indirect costs.

Freight

The charge imposed for the transport of goods by sea, air, or land.