CDS是FRM考试中的内容之一，CDS的相关内容有哪些呢？答案随融跃老师往下看！

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CDS：

In a Credit Default Swaps contract, a protection buyer (say A) pays a premium to the protection seller (say B), in exchange for payment if a credit event occurs.

A default swap acts like a put option on the reference obligation for the buyer of the swap. If there is a default, the buyer receives a payment,which limits the buyer's downside risk.

A long position in a corporate bond, is equivalent to a long position in a risk free bond plus a short position in a credit default swap.

Settlement：

The most common type of CDS is a cash etted CDS in whichtheprotection seller makes a single cash payment to the protection buyer(upon the occurrence of an event of default) equa! to the par value ofthe defaulted asset minus the current market price of the asset.

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A physically settled CDS requires the credit protection buyer to deliverthe defaulted reference asset to the protection seller, in return for whichthe protection seller pays a fixed cash amount to the buyer The fixedcash amount is specified in advance in the contract documentation andis usually the par value of the reference security.

Some cash-settled CDSs -known as digital CDSs -specify a fixed cashpayment from the protection seller to the protection buyer.

Nth to Default CDS：

Pays off when the nth default occurs in the reference asset portfolio.

Whenever the nth default occurs in the reference basket, the buyerstops paying the premium and receives the difference of the principalamount of the latest (nth) defaulted entity and the recovered value.

For example, a reference portfolio consists of bonds issued by 100different companies.

A first to default CDS pays off if and when the first default occurs.After the payout on the first  default, the CDS terminates.

A second to default CDS will pay off when the second defaultoccurs. This CDS does not pay anything for the first default, andterminates following the payout associated with the second default.