Write a note on credit default swaps.

CS Professional · Financial, Treasury and Forex Management · PYQS · June 2015
Write a note on credit default swaps.

Answer & Explanation:

Credit Default Swaps is a bilateral contract on one or more reference assets in which the protection buyer pays a fee or a premium through the life of the contract in return for a contingent payment by the protection seller following a credit event. The amount to be paid by the seller in case of a credit event would be the difference between the original value of the asset and the amount recovered from it.

Topics: Derivatives

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