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When you long a 5y CDS and the spreads <5y increase and the 5y spread remains constant, the premium leg value is decreased. It appears that the CDS value should increase, and you should have a positive sensitivity. However, depending on the shape of the survival probability curve, the protection leg value may also decreased, and then the CDS value, which ...


The $10^4$ factor is to calculate the answer in bps (basis points). It looks like $4$ is the denominator for the summation of the quarterly installments.

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