The focus in an asset- backed securities CDS is on the cash-paying ability of the collateral and not on bankruptcy. Why?
Answer to relevant QuestionsWhat is the cash flow of a 10-year bond that pays coupon interest semiannually, has a coupon rate of 7%, and has a par value of $100,000? How do market participants gauge the default risk of a bond issue? What is meant by a CUSIP number, and why is it important? A pension fund manager invests $10 million in a debt obligation that promises to pay 7.3% per year for four years. What is the future value of the $10 million? Suppose that a portfolio manager purchases $10 million of par value of an eight-year bond that has a coupon rate of 7% and pays interest once per year. The first annual coupon payment will be made one year from now. How much ...
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