24-73 Which of the following is NOT true?
A)FI bearing the credit risk of a loan is often different from the FI that issued the loan.
B)The buyer of a credit swap makes periodic payments to the seller until the end of the life of the swap.
C)Banks have been more willing than the insurance companies to bear credit risk.
D)The settlement of the swap in the event of a default involves either physical delivery of the bonds or a cash payment.
E)Credit swap specifies the number of different bonds that can be delivered in the event of a default.

Question

Quizplus · Accepted Answer

This statement is not true. In fact, insurance companies have been more willing than banks to bear credit risk, as it is a core function of their business.

24-73 Which of the Following Is NOT True