A Credit Default Swap Is

question 102

Multiple Choice

A credit default swap is

• A)a fancy term for a low-risk bond.
• B)an insurance policy on the default risk of a federal government bond or loan.
• C)an insurance policy on the default risk of a corporate bond or loan.
• D)None of the options

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Definitions:

Variable Costs

Costs that vary in direct proportion to changes in the amount of production or activity, like costs for direct labor and raw materials.

Fixed Costs

These are expenses that do not change in total regardless of the level of production or sales activity, such as rent, salaries, and insurance.

Unit Sales Price

The price at which a single unit of product is sold.

CVP Graph

A visual representation of the Cost-Volume-Profit analysis that shows the relationship between total costs, sales volume, and profit.