The fee paid on a CDS is equal to Probability of making a payment x Percentage loss in the event of a failure.

Name: The fee paid on a CDS is equal to Probability of making a payment x Percentage loss in the event of a failure.
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The fee paid on a Credit Default Swap (CDS) is typically determined by the credit spread, which reflects the credit risk of the reference entity, not directly by the probability of default and loss given default.

The Fee Paid on a CDS Is Equal to Probability