In the ISDA’s pay-as-you go template, why might there be payments by the credit protection buyer to the credit protection seller beyond that of the swap premium?
Answer to relevant QuestionsWhat are convertible bonds and exchangeable bonds? Give three reasons why the maturity of a bond is important. How do the cash flows for a CDS swap differ from that of a single-name CDS? Answer the below questions. (a) Explain how a single-name CDS can be used by a portfolio manager who wants to short a reference entity. (b) Explain how a single-name CDS can be used by a portfolio manager who is having ...Why does a credit default swap have an option-type payoff?
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