CDS , ( credit default swap), and CDO. These two forms of Credit derivatives are useful to mitigate credit risks, but can be very difficult to evaluate and understand the underlying assets, especially Collateralized Debt Obligations (CDOs). During the financial crisis starting 2007, Credit derivatives were intensively criticized for being abused by major financial institutions and incurred a huge loss to investors.

Please list at least one advantage and one disadvantage of both types of derivatives and explain your reason.