Credit Default Swaps

Curated and Reviewed by Lesson Planet

A pension fund would like to loan money to a company, but the company's bond rating isn't high enough. Sal discusses the private entities issuing ratings and credit default swaps, nicely illustrating the way a higher-rated company can insure a loan to allow the pension fund to loan money safely. He converts percentages to basis points and discusses the dangers of a company like AIG insuring more money than it's worth.

3 Views 0 Downloads

Additional Tags

credit default swap, pension fund, bond rating, loan default, basis points, social studies

Show More Show Less

Resource Details

Grade

11th - Higher Ed

Subjects

Social Studies & History

1 more...

Resource Type

Instructional Videos