The concerns with credit derivatives and, therefore, synthetic CDOs being used as CRT vehicles include ________.

Question

Quizplus · Accepted Answer

All of the options listed are valid concerns with credit derivatives and synthetic CDOs being used as CRT vehicles. Counterparty risk involves the possibility of a counterparty's inability to meet its contractual obligations. Legal risks may arise from these transactions if they are not properly structured or if there is a dispute between parties. If the counterparty selling credit protection fails, the buyer of the credit protection may be left with the credit exposure they believed they had eliminated.

The Concerns with Credit Derivatives And, Therefore, Synthetic CDOs Being