You have the choice to enter into a cash-settled or physically-settled CDS contract, both of which have the same premium, term and reference the debt of the same company. You decide to enter into a cash settled CDS to sell protection and subsequently the company defaults on its bond payments. You believe that the auction held to determine the recovery value of the bond resulted in a value much lower than fair. You are happy you entered into a cash-settled rather than a physically-settled CDS contract You wish you had entered into a physically settled CDS contract rather than a cash-settled CDS contract. The auction value is not relevant to this question Blank - do not select this