Exit 8008 PRM Certification - Exam III: Risk Management Frameworks, Operational Risk, Credit Risk, Counterparty Risk, Market Risk, ALM, FTP - 2015 Edition
Question 2 of 5
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Q2 Single choice

Which of the following carry greater counterparty risk: a forward contract on a 10 year note, or a commercial paper carrying a AA credit rating with identical maturity and notional?

  • A

    The forward contract has greater credit risk as its future gains are unknown

  • B

    Credit risk can not be compared in these terms

  • C

    They both carry the same credit risk

  • D

    The commercial paper has greater credit risk as the entire notional is outstanding

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