A survey by Fitch Ratings found that capital market participants felt that Credit Default Swaps, a form of derivative contract that pays off if the named underlier defaults on its debt obligations, are both more important as indicators of counterparty risk and a more important tool for managing counterparty risk than are other means, such as stock prices or credit ratings. comment and discuss. For example, what advantages or disadvantages of market-based indicators for making investment (bonds, loans, stock) decisions?

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Investors using a topdown investment approach begin their analysis by looking at macroeconomic factors before moving on to individual stocks For examp... View the full answer