In the context of credit risk, what is the primary role of the "protection seller" in a Credit Default Swap (CDS)?
Question 2
Consider a firm with an asset value ($V_A$) and a debt value ($D$). In a structural model of credit risk, what is the condition that typically triggers a default event?
Question 3
Which of the following best describes the main advantage of reduced-form models over structural models in modeling credit risk?
Question 4
A credit scoring model aims to classify applicants into "low risk" and "high risk" categories. Which statistical measure is commonly used to evaluate how well such a model distinguishes between these two groups?
Question 5
Which of the following is a key characteristic of a "synthetic CDO (Collateralized Debt Obligation)" in the context of credit derivatives?
