Seeing is believing!

Before you order, simply sign up for a free user account and in seconds you'll be experiencing the best in CFA exam preparation.

Find out more

Basic Question 2 of 9

The value of a CDS to the protection buyer is:

A. Expected PV of contingent leg - expected PV of fixed leg.
B. Expected PV of fixed leg - expected PV of contingent leg.
C. Zero.
Check Answer Previous Q Next Q Print

User Contributed Comments 4

User Comment
rodney176 So is the answer A or C ? The value is zero
merc5559 problem doesn't say it's a new CDS rodney
ashish100 yeah rodney
sjne09 yeah rodney
You need to log in first to add your comment.
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

Tamara Schultz

Learning Outcome Statements

explain the principles underlying and factors that influence the market's pricing of CDS;

CFA® 2025 Level II Curriculum, Volume 4, Module 30.