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Which of the following is not a credit event under ISDA definitions?
Suggested Answer: C
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According to ISDA, a credit event is an event linked to the deteriorating credit worthiness of an underlying reference entity in a credit derivative. The occurrence of a credit event usually triggers full or partial termination of the transaction and a payment from protection seller to protection buyer. Credit events include
- bankruptcy,
- failure to pay,
- restructuring,
- obligation acceleration,
- obligation default and
- repudiation/moratorium.
A rating downgrade is not a credit event.
13 comments · newest first
MA
Mammie
11 months ago
Obligation accelerations are definitely a credit event.
LO
Loreta
11 months ago
I thought restructuring was a credit event?
TY
Tyra
12 months ago
Wait, are you sure about that?
GW
Gwenn
12 months ago
Totally agree, it's definitely C!
MY
Myra
12 months ago
C is not a credit event.
WI
Willodean
1 year ago
I'm a bit confused; I thought all of these were credit events, but maybe rating downgrade isn't?
DE
Desire
1 year ago
I practiced a similar question before, and I think failure to pay is definitely a credit event.
FL
Fletcher
1 year ago
I feel like obligation accelerations are definitely a credit event, but I can't recall if rating downgrades count.
WA
Wai
1 year ago
I think I remember that restructuring is a credit event, but I'm not entirely sure about the others.
KA
Kathryn
1 year ago
I'm a bit stumped on this one. The options all seem to describe different learning approaches, but I'm not sure which one the question is specifically looking for as the "fourth major modality." I'll have to make an educated guess and move on.
SA
Samira
1 year ago
I think option C about documenting procedures for illegal acts makes sense. We practiced a similar question last week that focused on compliance risks.
MY
Myra
1 year ago
Hmm, I'm a bit confused on this one. I think the DoS Protection profile and the Zone Protection profile might be the right answer, but I'm not 100% sure.
TO
Tonja
1 year ago
Hmm, I'm a bit confused here. Is the IPv4 address configured for the local peer or the remote peer for state synchronization? I'll need to think this through carefully.