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Which of the following is not true about credit default swaps and credit risk? A FI examines creditworthiness of an applicant with the five Cs

Which of the following is not true about credit default swaps and credit risk?

A FI examines creditworthiness of an applicant with the five Cs of credit: character, capacity, collateral, conditions, and capital.

Credit risk can cause a FI to fail.

Credit risk refers to the risk that a FI may not have enough cash to pay back depositors.

Credit default swaps reduce credit risk for FIs.

All of the above are true

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