For mwvt9:

CFA Level II
#1

Which of the following most accurately describes the characteristics of options on credit default swaps? Options on credit indices are: A) more liquid than single issuer options and in a receiver option the option buyer has the right to buy a credit default swap. B) less liquid than single issuer options and in a receiver option the option buyer has the right to sell a credit default swap. C) more liquid than single issuer options and in a receiver option the option buyer has the right to sell a credit default swap. D) less liquid than single issuer options and in a receiver option the option buyer has the right to buy a credit default swap. Could someone direct what page in the Schweser reading swaptions on CDS is?

#2

I feel a backlash.

#3

Schweser p. 314?

#4

C In case you were looking for an answer

#5

McLeod, Would that mean the option buyer is looking for protection?

#6

In a receiver option, you have the right to sell CDS protection (receive premiums). The buyer of a payer option (pay premiums) is paying for the right to buy CDS protection.

#7

Thanks.