10. If you purchase CDS insurance on some bond, and that bond defaults, how may the settlement be handled? A. Settled in cash B. Sell the cheapest-to-deliver bond to the counterparty of the default swap at the market price C.Sell the cheapest-to-deliver bond to the counterparty of the default swap at the face value D. Either B and C E. Either A or C 11. What is the CDS spread? A. The difference between the interest rate on a risky bond and the interest rate on a municipal bond B. The difference between the inflation rate and the risk-free rate C. The insurance premium as a percentage of face value D. The liquidity premium as compared with a AA bond E. None of the above