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A risk analyst at a thriving financial institution is concerned about the credit risk linked to a significant loan extended to a large manufacturing company, which is currently witnessing a decline in its market share within its particular industry. In light of this, the analyst is considering the use of various credit risk mitigation techniques, including credit default swaps (CDS), to manage this exposure. Which of the following statements correctly identifies a key benefit of utilizing CDS in this scenario?
A
They quantify the manufacturing company's default risk and allow the bank to monitor changes in this risk on a real-time basis.
B
They provide an agreement to periodically revalue the loan and transfer any net value change.
C
They require the manufacturing company to pay back the loan in full at an earlier point in time.
D
They allow the bank to offset its exposure to the company with loan exposures to other manufacturing companies.