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19 godz. temu · After 1 year, the market now considers Risky Corp more likely to default, so its CDS spread has widened from 500 to 1500 basis points. The hedge fund may choose to sell $10 million worth of protection for 1 year to AAA-Bank at this higher rate. Therefore, over the two years the hedge fund pays the bank 2 * 5% * $10 million = $1 million, but ...
19 godz. temu · In recent years, the sell-off has become more rapid. In 2018, the government owned 62% of the group, but by December of last year that was down to just under 38%.
