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Financial Math CDS Presentation - CreditDefaultSwaps(CDS...

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Click to edit Master subtitle style  8/9/11 Credit Default Swaps (CDS) Elvis Pe ñ a (10-0929) Nicole Perez (10-0428) Milton de Aza (10-0033) Milton Hernandez (10-0890) Valerie Bodden K. (10-0014)
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 8/9/11 Content   Definition   Video   History - Development and Crisis   Valuation Formulas    Market In which It Is Traded
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 8/9/11 Definition Credit Default Swaps (CDS) are a  private contract  between  two parties  in which the buyer of protection  agrees to pay  premiums  to a seller of protection over a set  period of time.   In return, the seller of protection agrees to pay the  buyer an amount of  loss  created by a "credit event"  related to an underlying credit asset (loan or bond) - the  most common events are bankruptcy, restructuring or  default.  
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 8/9/11 Definition CDS are not a form of insurance, they are investments  that " bet " on whether a " credit event " will or will not  occur.   Because Credit Default Swaps are a financial  instrument, they are not subject to the same regulations  that insurance companies are.  There are  no regulatory capital requirements  for the  seller of protection (such as exists with insurance  companies and banks).
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 8/9/11 How It Works
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Click to edit Master subtitle style  8/9/11 Video Time
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