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  1. M

    hedging counterparty risk with credit derivatives

    Hi all, I have some doubt regarding this part in Gregory, chapter 4: "Hedging: Hedging counterparty risk with instruments such as credit default swaps (CDSs) aims to protect against potential default events and adverse credit spread movements. o Hedging creates operational risk and additional...
  2. M

    Gregory: Recovery impact on CVA

    Hello guys, I have a doubt about Recovery impact on CVA as explained in Gregory page 142 : "increasing LGD reduces the risk-neutral default probability but increases the loss in the event of default". If mathematically I can understand it, I have some problem to understand the economic logic...