Multiple Choice
Company X and company Y have mirror-image financing needs (they both want to borrow equivalent amounts for the same amount of time.Company X has a AAA credit rating,but company Y's credit standing is considerably lower.
A) Company X should demand most of the QSD in any swap with Y as compensation for default risk.
B) Since Y has a poor credit rating,it would not be a participant in the swap market.
C) Company X should more readily agree to a swap involving Y if there is also a swap bank providing credit risk intermediation.
D) Company X should demand most of the QSD in any swap with Y as compensation for default risk,and Company X should more readily agree to a swap involving Y if there is also a swap bank providing credit risk intermediation.
Correct Answer:
Verified
Correct Answer:
Verified
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