An article on bloomberg.com stated that Credit Suisse also used the CDS market to successfully bet...
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An article on bloomberg.com stated that "Credit Suisse also used the CDS market to successfully bet on a company rebound." In this circumstance, would a financial firm like Credit Suisse be buying CDS on the company's debt or selling them? OA. Selling since they believe the rebound will be temporary and that the company will eventually default on their debts. B. Buying since the value of the CDS they buy will increase in value if the company rebounds. OC. Selling since they will receive premiums on the CDS they sell and are betting the company will not default. OD. Buying since a CDS on a company's debt converts to stock when the company becomes profitable. ct: 1 An article on bloomberg.com stated that "Credit Suisse also used the CDS market to successfully bet on a company rebound." In this circumstance, would a financial firm like Credit Suisse be buying CDS on the company's debt or selling them? OA. Selling since they believe the rebound will be temporary and that the company will eventually default on their debts. B. Buying since the value of the CDS they buy will increase in value if the company rebounds. OC. Selling since they will receive premiums on the CDS they sell and are betting the company will not default. OD. Buying since a CDS on a company's debt converts to stock when the company becomes profitable. ct: 1
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