问题如下：
Leverage, Inc., an investment bank, has numerous credit default swaps with XYZ Corp. Leverage has established a break clause with XYZ Corp. to reduce risk. The break clause is trigger-based and may be exercised once the trigger is satisfied. The CEO of Leverage is concerned about a banker's paradox. Which of the following statements best describe the CEO's concern?
选项：
A.To be effective, the break clause option should not be used too early.
B.The weak firm often recovers after the use of the break clause.
C.The break clause option is used too early, and relations with the counterparty suffer.
D.The break clause option is used too late, and the weak firm gets weaker.
解释：
C A break clause (also called a liquidity put or early termination option) allows a party to terminate a transaction at specified future dates at its replacement value. Despite their advantages, break clauses have not been highly popular. One explanation is known as banker’s paradox, which implies that for a break clause to be truly useful, it should be exercised early on, prior to the substantial decline in a counterparty’s credit quality. Entities, however, typically avoid early exercise to preserve their good relationships with counterparties.
If you use it early for fear of your own loss, it implies your distrust of the credit quality of the counterparty, which will naturally damage the relationship between the two parties, namely banker's paradox.
D的话说如果执行太晚了，对手方会变得情况恶化，这样也会导致我们会有损失，为什么不是CEO关心的事情呢？
