In its simplest form, a credit default swap provides
A) insurance against default in the principle and interest payments of a credit instrument.
B) an alternative method for bond issuers to pay principle and interest payments via a swap.
C) bond investors with a method to swap interest payments for principle payments during a "credit event."
D) the government with a guarantee that certain bond issues will not run into credit problems.
A
You might also like to view...
With the help of an example, explain straddle positioning
What will be an ideal response?
Explain how a company's value chain works. Provide an example to illustrate your response
What will be an ideal response?
________ managers are typically concerned with the interaction between an organization and its external environment.
A. Frontline B. Regional C. Middle-level D. Functional E. Top-level
Lexington Company engaged in the following transactions during Year 1, its first year in operation: (Assume all transactions are cash transactions) 1. Acquired $3900 cash from issuing common stock. 2. Borrowed $2650 from a bank. 3. Earned $3550 of revenues. 4. Incurred $2490 in expenses. 5. Paid dividends of $490. Lexington Company engaged in the following transactions during Year 2: (Assume all transactions are cash transactions) 1. Acquired an additional $950 cash from the issue of common stock. 2. Repaid $1615 of its debt to the bank. 3. Earned revenues, $4950. 4. Incurred expenses of $2930. 5. Paid dividends of $1180. What was the amount of retained earnings that will be reported on Lexington's balance sheet at the end of Year 1?
A. $1060. B. $570. C. $3060. D. $3550.