The Credit Default Swap

question 44

Multiple Choice

The Credit Default Swap

• A)was designed to shift the risk of default to a third party.
• B)was a way to bet whether a specific mortgage or security would either fail to pay on time or fail to pay at all.
• C)could be used as a speculative investment or a hedge against risk.
• D)could be all of the above.

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Definitions:

Eusocial System

A complex social structure observed in some animals, characterized by cooperative caregiving, division of labor, and overlapping generations.

Instinct

Inherent inclinations towards a particular behavior, not learned but biologically programmed, observed in animals and humans.

Cuckoo Bird

A bird known for laying its eggs in the nests of other bird species, leading to its young being raised by the host birds.

Learned

Acquired or developed as a result of experience, study, or being taught.