How Likely Is a Venezuela Default?

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.

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

• Decreasing bond payments

• Rising oil prices

• Limited foreign reserves

• Increasing foreign investments

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

• 400%

• 200%

• 1000%

• 800%

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

• 45%

• 55%

• 65%

• 75%

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

• 84%

• 94%

• 100%

• 74%

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

• Oil production rates

• Credit default swap prices

• Foreign reserve levels

• Government spending