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Basic Question 2 of 9

The value of a CDS to the protection buyer is:

A. Expected PV of contingent leg - expected PV of fixed leg.
B. Expected PV of fixed leg - expected PV of contingent leg.
C. Zero.
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User Contributed Comments 4

User Comment
rodney176 So is the answer A or C ? The value is zero
merc5559 problem doesn't say it's a new CDS rodney
ashish100 yeah rodney
sjne09 yeah rodney
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Edward Liu

Edward Liu

Learning Outcome Statements

explain the principles underlying and factors that influence the market's pricing of CDS;

CFA® 2025 Level II Curriculum, Volume 4, Module 30.