Stulz, Chapter 18: Credit Risks and Credit Derivatives Practice Question set contains 9 pages covering the following learning objectives:
* Explain the relationship between credit spreads, time to maturity, and interest rates.
* Explain the differences between valuing senior and subordinated debt using a contingent claim approach.
* Explain, from a contingent claim perspective, the impact of [stochastic] interest rates on the valuation of risky bonds, equity, and the risk of default.
* Assess the credit risks of derivatives.
* Describe a credit derivative, credit default swap, and total return swap.
* Explain how to account for credit risk exposure in valuing a swap.
We have also provided individual links for each question to their respective forum discussion.
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