1.Which of the following entities is the largest market participant in the credit derivatives market?

A)   Commercial banks.

B)   Investment Banks.

C)   Insurance companies.

D)   Hedge funds.

2.Which of the following is least likely a stated use of credit derivatives by commercial banks and corporations?

A)   To satisfy regulatory standards.

B)   Income.

C)   Hedging.

D)   Speculation.

3.Which of the following entities is the fastest growing segment of the credit derivatives market?

A)   Investment Banks.

B)   Corporations.

C)   Hedge funds.

D)   Commercial banks.

答案和详解如下：

1.Which of the following entities is the largest market participant in the credit derivatives market?

A)   Commercial banks.

B)   Investment Banks.

C)   Insurance companies.

D)   Hedge funds.

The correct answer was A)

Commercial banks use credit derivatives to hedge their exposures and to satisfy regulators. They are the largest participant in the market, with a share of 35-40 percent.

2.Which of the following is least likely a stated use of credit derivatives by commercial banks and corporations?

A)   To satisfy regulatory standards.

B)   Income.

C)   Hedging.

D)   Speculation.

The correct answer was D)

Commercial banks use credit derivatives to hedge their exposures and to satisfy regulators. Corporations use credit derivatives for hedging and income enhancement.

3.Which of the following entities is the fastest growing segment of the credit derivatives market?

A)   Investment Banks.

B)   Corporations.

C)   Hedge funds.

D)   Commercial banks.

The correct answer was C)    

There are hedge funds that specialize in the trading of credit derivatives. In their pursuit of relative value opportunities, they have become quite active and are important providers of liquidity to the market. Hedge funds represent the fastest growing segment of the credit derivatives market.