What Is the Function of a Credit Derivative

question 13

Multiple Choice

What is the function of a credit derivative?

• A)to transfer risk to another party for a fee
• B)to derive their value from the underlying debt instruments such as loans
• C)for the purchaser of the credit derivative, to hedge default risk like an insurance policy against default would
• D)All of the above are functions of a credit derivative.

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A reference to Fred O. Walumbwa, a researcher known for his work on authentic leadership and related organizational behavior topics.

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