credit default option

Definition of "credit default option"
  1. A financial contract that provides compensation if a certain asset's issuer fails to meet their obligations
How to use "credit default option" in a sentence
  1. The bank purchased a credit default option to protect against potential loss.
  2. Due to the risk of the new venture, they decided to invest in a credit default option.
  3. How the credit default option works can seem complex, but essentially it serves as financial protection.
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