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Basic Question 0 of 7
The value of a CDS to the protection buyer is:
B. Expected PV of fixed leg - expected PV of contingent leg.
C. Zero.
A. Expected PV of contingent leg - expected PV of fixed leg.
B. Expected PV of fixed leg - expected PV of contingent leg.
C. Zero.
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 |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
describe the use of CDS to manage credit exposures and to express views regarding changes in shape and/or level of the credit curve;
describe the use of CDS to take advantage of valuation disparities among separate markets, such as bonds, loans, equities, and equity-linked instruments.
CFA® 2026 Level II Curriculum, Volume 4, Module 30.