All categories

3 years ago

Define credit default swap.

Business

1 answer:

KATRIN_1 [288]3 years ago

3 0

Answer:

Credit Default Swap (CDS) is a financial swap agreement or contract that allows investors to swap their credit risk with the credit risks of other investors.

Explanation:

Credit Default Swap is the most common form of credit derivative. It guarantees against bond risk and work like insurance policies.

If a lender is afraid of not being paid by his or her borrower, the lender can buy a CDS from another investor to offset the risk. The buyer of the CDS is required to makes some payments to the seller and in turn receive the loan repayment if the initial borrower defaults.

Third parties that sell CDS are usually banks, insurance companies and hedge funds.

You might be interested in

1. an activity which seeks to earn a profit by providing a good or service is known as a(n): a. industry. b. corporation. c. bus

DIA [1.3K]

It is called as C: Business

4 0

3 years ago

Imagine that you have invented a new snack food product and would like to market it to college students. What are some of the ad

valentina_108 [34]

Explanation:

An advertising message to be attractive and generate the desired effect, it must reach its potential audience through communication aligned with the interests and desires of the potential audience.

Firstly, as the potential audience is students, it would be ideal to use an advertising communication channel such as social media, where there is a large presence of young people.

It is ideal that advertising involves elements of student culture to generate identification, desire and proximity to the potential audience, so a good choice would be to develop a campaign that involves the product with sports for example, the snack company could be more involved with the culture students, such as sponsoring a college football team and advertising their brand at games, or distributing free snacks at college events.

5 0

3 years ago

If you deposit $100 of currency into a demand deposit at a bank, this action by itself

Dahasolnce [82]

Answer:

A) Does not change the money supply.

Explanation:

Demand deposits change the monetary base, because the monetary base equals currency plus demand deposits.

However, in itself, a demand deposit does not change the money supply. For the change in the money supply to occur, the bank must loan out some of the money in the deposit.

8 0

3 years ago

Suppose Specific Automakers is considering signing a long-term contract with the union representing its workers. Specific Automa

natka813 [3]

Answer: Worsen; benefits

Explanation:

Specific Automakers is signing a long term contract with the union who are the representative of workers.

Real wages should increase by = 2%

Expected inflation = 5%

Nominal wage increase = 7%

Actual inflation = 6%

Actual inflation is greater than expected inflation, so this would worsen the union and it is beneficial for the automakers because now real wage increase is only:

= Nominal wage - Actual inflation rate

= 7% - 6%

= 1%

This is an example of re-distributive cost of inflation.

8 0

3 years ago

Use the following selected information from Wheeler, LLC to determine the 2017 and 2016 trend percentages for net sales using 20

babunello [35]

Answer:

119.4% for 2017 and 100.0% for 2016.

Explanation:

2017 2016

Net sales $276,200 $231,400

Cost of goods sold $151,900 $129,590

Operating expenses $55,240 $53,240

Net earnings $27,820 $19,820

since we are using 2016 as a base year, the $231,400 in net sales represent 100%, so the trend percentage for 2017 = net sales 2017 / net sales 2016 $276,200 / $231,400 = 1.1936 = 119.4% or a 19.4% increase.

The base year's amount will always be 100% or 1, and the trend percentages will change relative to that year.

7 0

3 years ago

Read 2 more answers

Define credit default swap. ​

Define credit default swap.