RSK4804 Assignment 2 (COMPLETE ANSWERS) Semester 1 2025 – DUE 30 August 2025; 100% correct solutions and explanations.

RSK4804 Assignment 2 (COMPLETE ANSWERS) Semester 1 2025 – DUE 30 August 2025; 100% correct solutions and explanations.ASSIGNMENT 02 Due date: 30 August 2025 Unique number 865771 Aim: To evaluate your knowledge of some of the fundamental aspects of credit risk management. Answer the following questions and submit your assignment on myUnisa, at . Limit your assignment to a maximum of six pages. Use Times New Roman, font size 12. Question 1 [10] In recent years, there has been quite a buzz about credit default swaps. The turn of events following the 2008 Global Financial Crisis became a test of the systems that settle credit default swaps. a. Why are credit default swaps (CDS) necessary? (2) b. Why are some investors not in favour of credit default swaps? (2) c. Magong Rural Investments has invested R80m in bonds issued by Moepi Minerals Exploration. Magong Rural Investments has noted that Moepi Minerals Exploration may be experiencing financial difficulties. Therefore, Magong Platinum Project buys R80 m worth of CDS protection on Moepi Minerals Exploration debt, for three years, from the Sedibelo Development Bank, at a premium of 250 bps (2.5%) per annum. Explain the scenarios of