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Basic Question 1 of 5
In the cash settlement of a CDS,
B. The buyer pays the par value and gets the defaulted debt from the seller.
C. The seller pays the buyer the difference between par value and post-default market value of the debt.
A. The buyer delivers the defaulted debt and seller pays the par value.
B. The buyer pays the par value and gets the defaulted debt from the seller.
C. The seller pays the buyer the difference between par value and post-default market value of the debt.
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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
describe credit events and settlement protocols with respect to CDS;
CFA® 2025 Level II Curriculum, Volume 4, Module 30.