What will be the payoff on the cds

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Party X is a protection buyer in a $10 million notional principal senior CDS of Alpha, Inc. There is a credit event (i.e., Alpha defaults) and the market prices of Alpha's bonds after the credit event are as follows:

Bond P, a subordinated unsecured debenture, is trading at 15% of par.

Bond Q, a five-year senior unsecured debenture, is trading at 25% of par.

Bond R, a three-year senior unsecured debenture, is trading at 30% of par.

What will be the payoff on the CDS?

Reference no: EM132558613

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