- Regarding question #1, why can’t you use credit forward to protect the potential downside?
Why is binary credit options “provide payoffs contingent to a specific negative credit event?” Perhaps I should ask what is a binary credit option?
- Regarding question #6, why is the country beta used instead of the correlation between Brit. bond and German bond? Any chance of that correlation of .66 be used in other type of question?
Regarding question #2, I know the answer but don’t totally understand why reason #3 “benefit from events that give rise to price chagnes which are more prevalent on the short side than on the long side” is right?
Regarding question #6, what’s completeness fund & core satellite?