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How Likely Is a Venezuela Default?

How Likely Is a Venezuela Default?

Assessment

Interactive Video

Business

University

Practice Problem

Hard

Created by

Wayground Content

FREE Resource

The video discusses the financial instability of Venezuela, focusing on the likelihood of a default due to falling oil prices and limited foreign reserves. It highlights the significant debt owed by the government and its state-owned oil company, which equals 100% of the country's reserves. The cost to insure Venezuelan debt has surged, indicating a high probability of default within a year. Credit default swap prices suggest a 94% chance of default by 2019, reflecting investor concerns.

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5 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the main concern for investors regarding Venezuela's financial situation?

Decreasing bond payments

Rising oil prices

Limited foreign reserves

Increasing foreign investments

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

By how much did the cost to insure Venezuelan debt increase in December alone?

400%

200%

1000%

800%

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the implied probability of Venezuela defaulting by December next year?

45%

55%

65%

75%

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the chance of a Venezuelan default by 2019 according to swap prices?

84%

94%

100%

74%

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What should investors monitor to assess the likelihood of a Venezuelan default?

Oil production rates

Credit default swap prices

Foreign reserve levels

Government spending

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