

Understanding Credit Default Swaps
Interactive Video
•
Business
•
11th Grade - University
•
Practice Problem
•
Hard
Ethan Morris
FREE Resource
Read more
10 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the primary role of a credit rating agency?
To provide insurance to investors
To lend money to companies
To regulate financial markets
To assess the risk level of companies
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Why might an investor use a credit default swap?
To avoid paying taxes
To lower the company's credit rating
To insure against a company's default
To increase the interest rate on a loan
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What was a significant issue with AIG's handling of credit default swaps?
They set aside too much money for liabilities
They were heavily regulated like insurance
They did not set aside money for liabilities
They refused to write new contracts
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How do investment banks use credit default swaps to benefit pension funds?
By avoiding regulatory oversight
By making lower-rated securities acceptable
By increasing the interest rates on loans
By reducing the risk of high-rated securities
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is a senior tranche in a collateralized debt obligation?
The riskiest part of the debt
The part that gets paid first
The part that is not insured
The part with the lowest interest rate
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Why might a hedge fund enter into a credit default swap agreement?
To lend money to a company
To bet on a company's default
To insure their own assets
To increase their credit rating
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is a speculative use of credit default swaps by hedge funds?
Insuring their own loans
Reducing their own liabilities
Betting on the default of companies
Increasing the credit rating of companies
Access all questions and much more by creating a free account
Create resources
Host any resource
Get auto-graded reports

Continue with Google

Continue with Email

Continue with Classlink

Continue with Clever
or continue with

Microsoft
%20(1).png)
Apple
Others
Already have an account?
Similar Resources on Wayground
8 questions
Seeing Signs of Euphoric Activity in Markets, BofA Says
Interactive video
•
University
8 questions
Morningstar's Makdad on Asia Financial Earnings
Interactive video
•
University
8 questions
Alibaba's Growth Drivers Are Profound: Baillie Gifford's Anderson
Interactive video
•
University
8 questions
Embargo by Neighbors Is Blessing for Qatar Economy, Says Minister
Interactive video
•
University
6 questions
Fidelity's Yeung: Value Can Be Found Across All Sectors in China
Interactive video
•
11th - 12th Grade
6 questions
CLEAN: Entrepreneurs help lost Liberian generation back to work
Interactive video
•
10th Grade - University
8 questions
Zoom Earnings | Closing Bell
Interactive video
•
University
Popular Resources on Wayground
8 questions
Spartan Way - Classroom Responsible
Quiz
•
9th - 12th Grade
15 questions
Fractions on a Number Line
Quiz
•
3rd Grade
14 questions
Boundaries & Healthy Relationships
Lesson
•
6th - 8th Grade
20 questions
Equivalent Fractions
Quiz
•
3rd Grade
3 questions
Integrity and Your Health
Lesson
•
6th - 8th Grade
25 questions
Multiplication Facts
Quiz
•
5th Grade
9 questions
FOREST Perception
Lesson
•
KG
20 questions
Main Idea and Details
Quiz
•
5th Grade