Glossary

Reference Asset

See Also:

Credit Derivative: Credit Derivative is an over-the-counter (OTC) derivative designed to assume or shift credit risk, that is, the risk of a credit event such as a default or bankruptcy of a borrower. For example, a lender might use a credit derivative to hedge the risk that a borrower might default or have its credit rating downgraded. Common credit derivatives include credit default options, credit default swaps, credit spread options, downgrade options, and total return swaps.

Instrument: Instrument is a tradable asset such as a commodity, security, or derivative, or an index or value that underlies a derivative or could underlie a derivative.

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