In the practical use of credit default swaps

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Reference no: EM132030385

1. In the practical use of credit default swaps there:

is not an organized exchange or template for the agreement.

are limits to the amount of borrowing of both parties.

None of these.

are laws making them illegal in the United States.

is an organized exchange or template for the agreement.

2. You own a 10-year bond and a 20-year bond, both of which are non-callable bond and pay a coupon of 5%. What is true about the change in the value of your bonds, if the interest rate falls from 12% to 8%?

The value of the 20-yr bond will decrease by $46 more than the 10-yr bond

The value of the 20-yr bond will decrease by $27 more than the 10-yr bond

The value of the 20-yr bond will increase by $34 more than the 10-yr bond

The value of the 20-yr bond will increase by $27 more than the 10-yr bond

The value of the 20-yr bond will increase by $72 more than the 10-yr bond

Reference no: EM132030385

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