Recent content by harsh092

In reading 20, Schweser quotes, "Because of the uncertainty associated with financial distress, the value of subordinate debt acts more like an equity security than a debt security. Therefore, when a firm is in financial distress, the value of subordinate debt will increase as firm volatility...

I have been reading Du Laurentis el al. Chapter 2 where it states, "As VaR increases, so does the expectation of higher returns and economic capital. The cost of capital multiplied by VaR needs to be incorporated into lending decisions as a cost for banks that are price takers, or as a lending...

I was going through Jensen's Inequality and wanted to see the differences by creating a hypothetical scenario for a Zero Coupon Bond. While doing so in Excel, I noticed that the convexity adjustment changes as the maturity of the bond changes in a non linear fashion, as below: Could you...