In The Big Short: Inside the Doomsday Machine Michael Lewis writes a credit default swap was confusing

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In “The Big Short: Inside the Doomsday Machine” Michael Lewis writes “a credit default swap was confusing mainly because it wasn’t really a swap at all. It was an insurance policy, typically on a corporate bond, with semiannual premium payments and a fixed term.” In what way is a CDS a swap? In what way is a CDS different from an interest rate swap?

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Multinational Financial Management

ISBN: 9781119559900

11th Edition

Authors: Alan C Shapiro, Paul Hanouna

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