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Credit Questions

WhizzKidd

Member
Hi @David Harper CFA FRM,

Do you have any insight on the below:

WWR: If you are short a banks stock, and the bank value falls, so the value of your short trade goes up..Is this WWR?
Say you long a call from an airline on oil, if oil goes up the value of the call goes up, and the airline which is now less able to pay due to high oil costs..is that WWR?

Senior,Sub,Eq debt:
If a company is in distress (its vol and PD go up), what is the impact on the senior, sub and equity tranches?
Does the effect on sub.debt depend on the firm value being either high or low?

Basel:
Is Basel putting a strain on liquidity by limiting rehypothecation?

Products:
Which product has the smallest credit exposure (Nth basket, CLN or CDS?)
 
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