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Credit derivative: Quiz


Question 1: Alternatively in a synthetic CDO, the exposure to each underlying company is a ________.
Futures contractCredit default swapDerivative (finance)Swap (finance)

Question 2: In finance, a credit derivative is a derivative whose value is derived from the ________ on an underlying bond, loan or other financial asset.
Credit riskCredit default swapLiquidity riskInterest rate risk

Question 3: In a cashflow CDO, the underlying credit risks are bonds or ________ held by the issuer.
LoanDebtConsumer debtCredit (finance)

Question 4: ________ (the risk that the reference entity will become bankrupt)
Bond (finance)DebtBankruptcyInsolvency

Question 5: One challenge in regulating these and other derivatives is that the people who know most about them also typically have a vested ________ in encouraging their growth and lack of regulation.

Question 6: [2] Credit derivatives are ________ between a buyer and seller under which the seller sells protection against the credit risk of the reference entity.
ContractDelegation (law)ShariaDuress

Question 7: Credit default products are the most commonly traded credit derivative product[3] and include unfunded products such as credit default swaps and funded products such as ________ (see further discussion below).
Collateralized mortgage obligationHigh-yield debtCollateralized debt obligationAsset-backed security

Question 8: Backwardation • ________  • Contango • Currency future • Financial future • Forward market • Forward price • Forward rate • Interest rate future • Margin • Pricing of Forwards  • Pricing of Futures  • Single-stock futures
Futures contractSwap (finance)Derivatives marketDerivative (finance)

Question 9: The ISDA[4] reported in April 2007 that total notional amount on outstanding credit derivatives was $35.1 trillion with a gross ________ of $948 billion (ISDA's Website).
Market valueReal estate appraisalAppraisal InstituteInternational Valuation Standards Committee


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