About Salman Khan
Salman Khan is the Founder, Executive Director, and Faculty of the Khan Academy, whose mission is to provide a free world-class education to anyone, anywhere. He has worked for both hedge funds and Fortune 500 companies and holds an MBA from Harvard Business School, where he was the president of his class. He also attended MIT, where he received three degrees: a Masters in Electrical Engineering & Computer Science, a B.S. in Electrical Engineering & Computer Science, and a B.S. in Mathematics.More Topics Explained
About CNBC Explains
CNBC Explains dissects the complicated economics of our world — everything from stocks and corporate balance sheets, to international trade and government policy. We are pleased to feature the work of Salman Khan, founder of the Khan Academy, as well as the reporting of CNBC anchors and editors. Each short video explains a complex topic using a unique digital interface and easy-to-understand style that simplifies even the most arcane topics.
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Credit Default Swaps: CNBC Explains
Published:
Thursday, 4 Aug 2011 | 3:23 PM ET
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By: CNBC Explains
Credit default swaps, also known as CDS, gained notoriety in the 2008 financial crisis when firms such as AIG found themselves overexposed to credit risks. In simple terms, credit default swaps act as insurance against default, but these financial instruments are actually used in a number of complex ways. How are credit default swaps employed, and what is the rationale for these securities? Salman Khan of the Khan Academy explains.
From the first video, you’ll understand:
- The rationale behind credit default swaps
- How CDS are used as insurance
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From the second video, you’ll understand:
- Several ways credit default swaps are used in practice
- The various players who transact CDS
- How CDS can be understood as “side bets”
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