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Which of the following is correct about why investors will be interested in investing in a CDS created by a bank on its own loans?
Which of the following is correct about why investors will be interested in investing in a CDS created by a bank on its own loans?
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For a return, they can take on risk that they do not have access to. In other words, with CDS they can invest in something they could not before.
By investing in CDS, they are buying insurance on the banks loans.
Profits on a CDS are tax exempt.
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