In a One-Year Forward Contract on a CDS That Will

question 8

Multiple Choice

In a one-year forward contract on a CDS that will last five years,what usually happens if there is a default during the first year?

• A) There is a payoff to the forward protection buyer at the time of default
• B) There is a payoff to the forward protection buyer at the end of one year
• C) There is a payoff to the forward protection buyer at the end of six years
• D) The contract ceases to exist

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Definitions:

Customer Service Failures

Instances where a business fails to meet the expected levels of service, leading to customer dissatisfaction.

Order To Cash

A business process that covers the entire order processing system from receipt of an order to the point where the order is fulfilled and payment is received.

Order Cycle

The complete process or time taken from placing an order to the delivery of the product or service to the customer.

Customer Service

The support and guidance given by a business to its customers who purchase or utilize its goods or services.