alleryStart learning →A CDS spread is 50 basis points on a $10 million notional. What is the annual premium?
A$5,000
B$50,000
C$500,000
D$5 million
Answer & Solution
Correct answer: B. $50,000
50 basis points is 0.5%, and 0.5% of $10 million is $50,000 a year.
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