1. In a CDS contract, the party that agrees to make a series of fixed periodic payments to the counterparty over the contract term in return for a promise to be compensated by the counterparty in case of default is best known as: A. the credit protection buyer. B. the credit protection seller. C. an option… Read More

1. Which of the following statements is most accurate? The four measures commonly used to quantify credit risk are: A. credit spread, risk premium, present value of expected loss and recovery rate. B. probability of default, loss given default, expected loss, and the present value of expected loss. C. recovery rate, loss given default, expected… Read More

1. The interest rate model is based upon: A. pathwise valuation. B. Pascal Triangle. C. a lognormal model of interest rates. 2. The method(s) most likely used to estimate interest rate volatility is (are): A. the historical volatility method only. B. the implied volatility approach only. C. the historical volatility method or the implied volatility approach.… Read More