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To assess the value of a CDS, we can discount the expected cash flows with the risk-free rate because : A. CDS sellers are generally
To assess the value of a CDS, we can discount the expected cash flows with the risk-free rate because :
A. CDS sellers are generally risk neutral
B. The discount rate used is without consequence
C. CDS buyers are insensitive to risk because they hold these securities to implement hedging
strategies
D. Probabilities that reflect the true probabilities of default are used to calculate expected cash
flows
E. None of the above
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