A credit default swap is structure similar to which of the following?
A)Fixed rate mortgage.
B)Common stock investment.
C)A coupon bond.
D)Insurance contract.

Question

Quizplus · Accepted Answer

A credit default swap is a contract between two parties where one party agrees to pay the other in the event of a default by a third party. This is similar to an insurance contract, where the insurer agrees to pay the insured in the event of a covered loss.

A Credit Default Swap Is Structure Similar to Which of the Following