In a Credit Forward Contract Transaction

question 50

Multiple Choice

In a credit forward contract transaction

• A)the credit forward buyer is the lender who is trying to hedge the loan.
• B)the credit forward seller is the lender who is trying to hedge the loan.
• C)the credit forward buyer will pay the credit forward seller if the credit spread at the maturity of the forward contract is less than at the initiation of the contract.
• D)the credit forward seller will pay the credit forward buyer if the credit spread at the maturity of the forward contract is greater than at the initiation of the contract.
• E)the characteristics of the benchmark bond must be the same as those of the bank's loan to the borrower.