If interest rates increase, the value of a fixed income contract decreases and vice versa10/24/2023 ![]() ![]() ![]() Under the contract, the protection buyer is compensated for any loss emanating from a credit event in a reference instrument. It is a contract between two parties, called protection buyer and protection seller. The company is called the reference entity and the default is called credit event. ![]() Definition: Credit default swaps (CDS) are a type of insurance against default risk by a particular company.
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