The pricing of credit default swaps (CDS) is primarily influenced by:
Probability of Default:The likelihood that the underlying entity will default on its obligations.
Duration:The term or maturity of the CDS contract.
Loss Given Default:The expected loss if the underlying entity defaults.
Market spreads, while relevant to bond pricing and other instruments, are not a direct factor in the calculation of the pricing of CDS contracts.
References
Verified information on CDS pricing factors from the document
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