In: Economics
Which of the following is true about a credit default swap?
A. All three of these potential answers here are true about a credit default swap.
B. It is basically the same as a mortgage backed security
C. It is insurance on an investment
D. It helps to reduce the defualt rate on mortgages
C. It is insurance on an investment
Credit default swap are a type of an insurance against the default risk by a particular company.