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Financial Risk Manager Part 1

Financial Risk Manager Part 1

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A risk analyst at a growing financial institution is concerned about the bank's loan exposure to a large manufacturing company that is facing a significant decrease in its market share within its industry. The analyst is considering various credit risk transfer strategies, including the use of credit default swaps (CDS), to manage and mitigate this risk. Which of the following statements correctly identifies an appropriate benefit of using CDS in this situation?

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