*Spoiler* Schw Sample Exam 1 PM Credit options
“Reneau describes a credit options strategy that pays the holder a fixed sum, which is agreed upon when the options is written, and occurs in the event that an issue or issuer goes into default.”…..
So this dude is talking about a binary credit option
In the next paragraph…
“Reneau mentions that credit options written on an underlying asset will protect against declines in asset valuation.”
They are asking if Reneau is correct in the second statement about the binary credit options.
Shouldn’t this be qualified with IF a specific event occurs or was I supposed to link his earlier statement to his second one?
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