After a long time I am putting few basic quiz questions,  Lets check out who hit the bull’s eye. You can provide your answers by putting imagesup the comments , there are only two questions but they will help to understand the basics OTC derivative market:

  • What is correct about a credit default swap (CDS)?
  1.  A CDS is the exchange of two cash flows: a fee payment and a conditional payment, which occurs only if certain circumstances are met.
  2. The CDS will have value for the protection seller only if defined credit conditions are met
  3. The protection seller will always receive the premiums.
  4. CDS is a type of insurance in which default of an asset triggers payment Continue reading
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