Hi David,
I am unable to understand the case study.Can you please explain how it was supposed to earn money?.
Also,
It says it was a long credit risk on equity , meaning it would benefit by an increase in credit risk on equity, but as they had sold protection on equity they would have to pay...
Hi David,
I was going through the material (Gregory) on page 52 , can you please explain as to how does the exposure increase in case of bonds when the interest rates decline?
Hi David,
I am a little confused on page no. 43 of Malz reading, I can't figure out why both k as well as p(m) are assigned the value -2.33.
As per my understanding p(m) has been assigned this value as we are considering a portfolio loss (dependent on the market conditions to be 0.01) so we are...
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