Question: Question 7 (15 points) 1. Explain the concept of wrong way risk and provide three examples of it. 2. Explain the the relationship between bond

Question 7 (15 points) 1. Explain the concept of wrong way risk and provide three examples of it. 2. Explain the the relationship

Question 7 (15 points) 1. Explain the concept of wrong way risk and provide three examples of it. 2. Explain the the relationship between bond yield, risk free rate, and CDS spreads 3. Name 4 reasons that contributed to trigger the Global Financial Crisis (GFC). 4. What are ABS CDO's? what went wrong with them the during the GFC? 5. Explain the concept of downgrade triggers and how it affected AIG durong the GFC. Question 7 (15 points) 1. Explain the concept of wrong way risk and provide three examples of it. 2. Explain the the relationship between bond yield, risk free rate, and CDS spreads 3. Name 4 reasons that contributed to trigger the Global Financial Crisis (GFC). 4. What are ABS CDO's? what went wrong with them the during the GFC? 5. Explain the concept of downgrade triggers and how it affected AIG durong the GFC

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