Ultimate access to all questions.
Upgrade Now 🚀
Sign in to unlock AI tutor
Which of the following statements accurately evaluates the use of credit indices and fixed coupons in pricing CDS transactions?
A
Credit indices provide a precise average of CDS spreads for individual companies, while fixed coupons ensure consistent payments regardless of market fluctuations.
B
Credit indices simplify trading by offering an average CDS spread for a portfolio of companies, and fixed coupons facilitate predictable payments throughout the contract duration.
C
Credit indices consolidate CDS spreads for individual companies, ensuring uniformity in pricing, whereas fixed coupons adjust payments based on market conditions.
D
Credit indices track individual CDS spreads for diverse companies, while fixed coupons stabilize payments by accounting for variations in market volatility.
