Can anyone explain me what is a Credit Default Swap? And what are the merits and demerits of it?
In: Other
To add to the other good answers, the name is also kind of confusing. What it’s saying is “Credit” (loaning someone money) “Default” (when they don’t pay that loaned money back) is being “Swapped” (trade the risk to a different company for a small payment, like an insurance policy kind of)
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