medium · Debt Capital Markets credit-ratings-risk
In a Credit Default Swap (CDS), what is the primary obligation of the protection seller?
- To independently assign and publish a credit rating for the reference entity.
- To physically deliver the underlying reference bonds to the issuer at maturity.
- To compensate the buyer for the loss if the reference entity suffers a credit event.
- To remit the recurring quarterly protection premium owed to the protection buyer.
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