这个14%是不是累计的概念，每年要多付的还是2%

问题如下：

4. Based on Exhibit 1, the upfront premium as a percent of the notional for the CDS protection on Kand Corp. would be closest to:

选项：

A.

2.0%.

B.

9.8%.

C.

14.0%.

解释：

C is correct.

An approximation for the upfront premium is (Credit spread – Fixed coupon rate) × Duration of the CDS. To buy 10-year CDS protection, Deem Advisors would have to pay an approximate upfront premium of 1,400 bps [(700 – 500) × 7], or 14% of the notional.

A is incorrect because 200 bps, or 2%, is derived by taking the simple difference between the credit spread and the fixed coupon rate (700 – 500), ignoring the duration component of the calculation. B is incorrect because 980 bps, or 9.8%, is the result of dividing the credit spread by the fixed coupon rate and multiplying by the duration of the CDS [(700/500) × 7].