The type of credit insurance that landed AIG into trouble in 2008 is called

A) insurance rate swaps.
B) monoline insurance.
C) default insurance.
D) credit default swaps.


D

Economics

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Let if  be the interest rate being paid on a foreign bond, and let i be the interest rate being paid for a domestic bond; let P be the price of the domestic bond and let Pf  be the price of the foreign bond. If exchanges rates are fixed and the bonds are equal in terms of risk:

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