The Compensation from a CDS Can Come from

question 123

Multiple Choice

The compensation from a CDS can come from

• A) the CDS holder delivering the defaulted bond to the CDS issuer in return for the bond's par value.
• B) the CDS issuer paying the swap holder the difference between the par value of the bond and the bond's market price.
• C) the federal government paying off on the insurance claim.
• D) the CDS holder delivering the defaulted bond to the CDS issuer in return for the bond's par value, and the CDS issuer paying the swap holder the difference between the par value of the bond and the bond's market price.
• E) None of the options are correct.

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Definitions:

Unconditioned Stimulus

A stimulus that elicits a natural, reflexive response without the need for prior conditioning.

Minimal Effects

Changes or impacts that are barely noticeable or have little to no significant influence on the overall condition or outcome.

Stimulus-Substitution Theory

Pavlov’s view that the pairing of the conditioned stimulus (CS) and unconditioned stimulus (UCS) allows the CS to elicit the unconditioned response (UCR) as the conditioned response (CR).

Brain Areas

Specific regions within the brain that have distinct functions or roles, such as the hippocampus for memory or the amygdala for emotion processing.