The 5-year CDX NA IG index is quoted by a market maker as bid 145...
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The 5-year CDX NA IG index is quoted by a market maker as bid 145 bp, ask (offer) 150 bp. This index includes 125 North American investment-grade companies. You buy $500,000 worth of protection per company. If one of the companies in the index defaults, what would be the reduction in your CDS premium?
a. 7,750
b. 7,500
c. 500,000
d. 15,500
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