Multiple Choice
In a credit forward contract transaction
A) the credit forward buyer is the lender who is trying to hedge the loan.
B) the credit forward seller is the lender who is trying to hedge the loan.
C) the credit forward buyer will pay the credit forward seller if the credit spread at the maturity of the forward contract is less than at the initiation of the contract.
D) the credit forward seller will pay the credit forward buyer if the credit spread at the maturity of the forward contract is greater than at the initiation of the contract.
E) the characteristics of the benchmark bond must be the same as those of the bank's loan to the borrower.
Correct Answer:
Verified
Correct Answer:
Verified
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