CREDIT DEFAULT SWAPS ___CDS

[QaB2i]

Again, why would a bank make an obvious "going to lose its shirt" convertible/hybrid loan at all?

And how would that Bank hedge against 100% loss of the loan assuming Bank makes the loan? & assuming such a hedge trade were possible for 100% of the loan face, was it also possible to hedge ....1000% of the face?


then

Could that same Bank report a steady increasing profit year in year out through the above activities?