Consistent with actual insurance policies, the CDS buyer must own the underlying reference securities.

Name: Consistent with actual insurance policies, the CDS buyer must own the underlying reference securities.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A Credit Default Swap (CDS) does not require the buyer to own the underlying reference security; it is a derivative that allows for speculation or hedging against the credit risk of an entity without owning the actual debt.

Consistent with Actual Insurance Policies, the CDS Buyer Must Own