Question 5 (3 points) Which ONE of the following statements on CDS is INCORRECT? A. The buyer of CDS acquires protection from the seller against a default by a particular company or country (the reference entity) by making periodic payments to seller of the CDS B. CDS can be settled in cash or by physical delivery. C. CDS can be used to transfer volatility risks to a third party. D. CDS do not require collateral to be posted by either the buyer or the seller of the insurance. E. If credit event does not occur prior to maturity of contract, CDS seller does not make a payment to buyer. F. Generally, seller of protection pays compensation to buyer if a"credit event" occurs and the contract is terminated. a