AAFM Exam CWM_LEVEL_2 Topic 6 Question 82 Discussion

Actual exam question for AAFM's CWM_LEVEL_2 exam

Question #: 82
Topic #: 6

Section A (1 Mark)

The risk that occurs when the index used for determination of interest earned on the CDO trust collateral is different from the index used to calculate the interest to be paid on the CDO trust is known as______________.

ABasis Risk

BYield Curve Risk

CDefault Risk

DSpread Risk

Show Suggested Answer

Suggested Answer: C

by Carmela at Jul 09, 2024, 10:48 AM

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Valene

24 hours ago

Basis Risk, the bane of CDO enthusiasts. It's like playing a game of tug-of-war between the collateral and the payouts. Better bring your A-game to this one!

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Marti

4 days ago

Ah, Basis Risk. The classic culprit behind those pesky interest rate headaches. Just when you thought you had it all figured out, the indices go and pull a fast one on you.

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