24-52 The vast majority of credit derivative contracts held by commercial banks consist of credit
A)forward contracts.
B)futures contracts.
C)options.
D)swaps.
E)currency contracts

Question

Quizplus · Accepted Answer

Swaps make up the majority of credit derivative contracts held by commercial banks as they allow banks to transfer the credit risk of a specific borrower or portfolio of borrowers to another party in exchange for a stream of payments. Credit forwards, futures, and options are less commonly used in the credit derivative market. Currency contracts, while related to financial risk management, are not typically classified as credit derivatives.

24-52 the Vast Majority of Credit Derivative Contracts Held by Commercial