After the United Kingdoms electorate voted on June 23, 2016, to leave the European Union, an article
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After the United Kingdom’s electorate voted on June 23, 2016, to leave the European Union, an article in the Wall Street Journal noted: “Creditdefault swaps on the debt of Bank of America and Citigroup Inc. are up 25% from a day earlier.”
What does an increase in the price of credit default swaps on bonds issued by Bank of America and Citigroup Inc. (which is also a bank) indicate about the bonds? What likely happened to the yields on those bonds?
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Money, Banking, and the Financial System
ISBN: 978-0134524061
3rd edition
Authors: R. Glenn Hubbard, Anthony Patrick O'Brien
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