Credit default swap is classified as:
A) an exchange-traded transaction.
B) an over-the-counter transaction.
C) none of the above.

Question

Quizplus · Accepted Answer

Credit default swap (CDS) is an over-the-counter (OTC) transaction, and is not traded on an exchange. It is a type of derivative that allows investors to hedge against or speculate on the creditworthiness of an underlying entity, such as a corporation or government.

Credit Default Swap Is Classified As