Explanation:

It is designed to transfer the credit exposure of fixed incomeproducts between two or more parties.
Option C: Research shows that credit default swaps used by large investmentbanks to prop up their subprime mortgage derivatives scam were directlylinked to the 2007-2008 Financial Crisis and housing bubble collapse.
• The researchers found that the presence of credit default swaps furtherstimulated the strong demand for mortgage-backed securities.
• This led to lax lending standards in the mortgage origination market andencouraged predatory lending and borrowing practices. It eventually ledto a collapse of the debt bubble and the crisis.
Option A: The meltdown happened largely due to two reasons, which is notrelated to debt transfers (as in Credit Default Swap):
• The chain of events that began with the surprise devaluation of the yuansince August 2015. More than $5 trillion was wiped off on global stock prices since then.
• China's industrial activity is slowing sharply, and by the failure of theChinese government to unveil bold new market interventions today toprop up equity prices has been another major reason.