new to CDS. Few basic questions on terminology and conventions:
If I look at a Sovereign 5-year Chinese CDS then the graph shows a CDS value of 42.520. (Source). Is this 42.52 basis points?
Is it the case the lower the CDS value the "better" the country is doing i.e. the less likely to default (in simplistic terms).
It has a 40% recovery rate (i.e. I get back 40% if there is a default), but how does one then derive a price for the CDS?
Apologies for all the questions!