In Its Simplest Form,a Credit Default Swap Provides

question 73

Multiple Choice

In its simplest form,a credit default swap provides

• A) insurance against default in the principle and interest payments of a credit instrument.
• B) an alternative method for bond issuers to pay principle and interest payments via a swap.
• C) bond investors with a method to swap interest payments for principle payments during a "credit event."
• D) the government with a guarantee that certain bond issues will not run into credit problems.

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Definitions:

Magnetic Lines

Invisible lines of magnetic force that emanate from magnetic fields, showing the direction a magnetic force acts.

Flux

Flux, in the context of electromagnetism, refers to the rate of flow of a property per unit area, such as the magnetic field lines per unit area in a magnetic circuit.

Induction Motor

An induction motor is a type of asynchronous electric motor where power is supplied to the rotor by electromagnetic induction, rather than direct electrical connection.

Line-voltage

The voltage level provided by the electrical utility company, typically present in power lines.