n NISM Certifications
XIII NISM Series XIII
Medium

What is the main purpose of a 'Credit Default Swap (CDS)'?

Practice question from NISM Series XIII for SIF - Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. To insure against the default of a borrower

    Correct answer

  2. B

    To speculate on currency movements

  3. C

    To hedge against interest rate fluctuations

  4. D

    To facilitate currency exchange transactions

A full explanation for this question is being written. In the meantime, the correct answer is highlighted above.

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