Knowledge Application - Greek Credit-Default Swap Volumes Drop to Record Low Before Bond Exchange

If you click on the CDS under the labels present in the right column, you'll come across a video which is an introduction to Credit Default Swaps. They have been discussed in the CFA Level II Curriculum under Derivatives and a complete reading is based on these instruments. Below is the link to the Bloomberg article which discusses this topic with reference to Greek Bonds. The article act as an application to what we have been studying related to CDS.

Read the article: http://www.bloomberg.com/news/2012-03-08/greek-default-swap-trades-dwindle-to-record-low-before-debt-swap-deadline.html

News Pick - Sovereign, Corporate Bond Risk Rises, Credit-Default Swaps Show

How Credit Default Swaps operate and the nature of such instruments a long with their relation with the Corporate Bond Risk have been explained in the CFA Level II Curriculum, Fixed Income. If you've covered that area and you are aware of the relationship between Corporate Bond Risk and Credit Default Swap then this  story of Bloomberg will make sense to you.

Read the article: "http://www.bloomberg.com/news/2012-02-27/sovereign-corporate-bond-risk-rises-credit-default-swaps-show.html"

Business Week - Corporate Bond Risk Falls in Europe, Credit-Default Swaps Show

Credit-Default Swaps are kind of insurance against defaults. They have been discussed in detail in CFA Level II curriculum. Their spread is the cost of getting insurance in case of default. The higher the default risk, the higher is the spread and vice versa. How European Corporate Bonds and Credit-Default Swaps are performing, is captured by the Business Week Article.

Read the article: http://www.businessweek.com/news/2012-02-13/corporate-bond-risk-falls-in-europe-credit-default-swaps-show.html 

News Pick - U.S. Company Credit-Default Swap Index Rises From Three-Week Low

Credit Default Swaps (CDS) are discussed in detail in Level II. They are important tool to hedge against the risk of default and act like an insurance. What exactly are they and how they are different from ordinary insurance has been briefly elaborated in the video posted earlier. The following article, link provided at the bottom, published in Business Week represents a real life example of Credit Default Swaps.

http://www.businessweek.com/news/2011-12-29/u-s-company-credit-default-swap-index-rises-from-three-week-low.html

Video Tutorial - Credit Default Swaps (Introduction)