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QUESTION 2 A credit forward is a forward agreement that hedges against a decrease in default risk on a loan after the loan rate is

QUESTION 2

A credit forward is a forward agreement that

		hedges against a decrease in default risk on a loan after the loan rate is determined and the loan issued.
		hedges against an increase in default risk on a loan before the loan rate is determined and the loan issued.
		hedges against an increase in default risk on a loan after the loan rate is determined and the loan issued.
		hedges against a decrease in default risk on a loan before the loan rate is determined and the loan issued.
		hedges against an increase in default risk on a loan after the loan rate is determined and before the loan is issued.

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