Question
The answer is B please explain why The 5-year CDX NA IG index is quoted by a market maker as bid 145 bp, ask (offer)
The answer is B please explain why
The 5-year CDX NA IG index is quoted by a market maker as bid 145 bp, ask (offer) 150 bp. This index includes 125 North American investment-grade companies. You buy $500,000 worth of protection per company. If one of the companies in the index defaults, what would be the reduction in your CDS premium?
a. 7,750
b. 7,500
c. 500,000
d. 15,500
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Financial Literacy And Money Script A Caribbean Perspective
Authors: Christine Sahadeo
1st Edition
3319770748, 978-3319770741
