_______ is in an insurance contract against the default of one or more borrowers.
A)Collateralized debt obligation
B)credit default swap
C)Freddie Mac
D)Adjustable-rate mortgage

Question

Quizplus · Accepted Answer

A credit default swap is an insurance contract between two parties where one party pays the other party regular premiums in exchange for protection against the default of one or more borrowers. The party receiving the premiums agrees to pay a certain amount in case of default, essentially assuming the risk of the borrower defaulting. Collateralized debt obligations, Freddie Mac, and adjustable-rate mortgages are not directly related to insurance against borrower default.

_______ Is in an Insurance Contract Against the Default of One