Question
18 Given the following information of a credit default swap, which of the following statements is true? Notional $10MM Coupon 100 bps CDS Spread 280
18
Given the following information of a credit default swap, which of the following statements is true?
| Notional | $10MM |
| Coupon | 100 bps |
| CDS Spread | 280 bps |
| Maturity | 5 Years |
| Risk-Free Rate (Discount Rate) | 3% |
Review Later
The protection buyer needs to make an upfront payment to the seller since there is a positive upfront premium.
The protection buyer does not need to make an upfront payment to the seller.
The protection buyer needs to make an upfront payment to the seller since there is a negative upfront premium.
The protection seller needs to make an upfront payment to the seller since there is a positive upfront premium.
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Multinational Finance
Authors: Kirt Butler
2nd Edition
0324004508, 978-0324004502
