Question: Answer the below questions. (a) For a single-name credit default swap, what is the difference between physical settlement and cash settlement? (b) In physical settlement,

Answer the below questions.
(a) For a single-name credit default swap, what is the difference between physical settlement and cash settlement?
(b) In physical settlement, why is there a cheapest-to-deliver issue?

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a For a singlename credit default swap CDS physical delivery for a credit event means that the protection buyer delivers a reference obligation to the protection seller in exchange for a cash payment ... View full answer

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a. For a single-name credit default swap, what is the difference between physical settlement and cash settlement? b. In physical settlement, why is there a cheapest-to-deliver issue?

a. For a single-name credit default swap, what is the difference between physical settlement and cash settlement? b. In physical settlement, why is there a cheapest-to-deliver issue? AppendixLO1

a. For a single-name credit default swap, what is the difference between physical settlement and cash settlement? b. In physical settlement, why is there a cheapestto-deliver issue?

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