Cash settlement for a credit default swap (CDS)means the:

Question

Quizplus · Accepted Answer

Cash settlement for a credit default swap occurs when the protection seller pays a net cash amount to the protection buyer in the event of a credit event such as default or bankruptcy of the reference entity. This net amount is usually calculated as the difference between the notional value of the debt and its recovery value. Therefore, option C is the correct answer as it describes the payment from the protection seller to the protection buyer in a cash settlement.

Cash Settlement for a Credit Default Swap (CDS)means The