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What is issuer specific risk?
What is issuer specific risk?

... No additional data on individual bonds needed ...
Modeling and Forecasting Customer Behavior for Revolving Credit
Modeling and Forecasting Customer Behavior for Revolving Credit

Finding Value in US High Yield Fixed Income
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MACROECONOMIC ENVIRONMENT

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... 9% annually on the fund at all times. What is the amount of ten equal annual payments you must put into the fund (the last payment on the date of retirement) if you want to accomplish your goal? ...
Chapter 6 "DO YOU UNDERSTAND" QUESTIONS Assume that the
Chapter 6 "DO YOU UNDERSTAND" QUESTIONS Assume that the

... Answer: The borrower of the money sells a government security to the lender along with an agreement to repurchase it at a future time at a predetermined higher price that is based on the repo rate. Thus the lender of the money owns the security until the money is paid back with interest, so the secu ...
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IAS INDUSTRY ACCOUNTING STANDARDS
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... acquisition are recorded as a return of investment. All other dividends are recorded as dividend income.  The recording of dividends as dividend income is the major difference between the cost and the equity methods. ...
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... identical to those that will apply under the Solvency II delegated act. They will be subject, however, to certain additional requirements specific to liquidity, such as a minimum issue size (EUR 100 million) or a maximum weighted average life (no more than 5 years). A minimum issue size improves ma ...
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Impact on Rising Interest Rates

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Securitization

Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations (or other non-debt assets which generate receivables) and selling their related cash flows to third party investors as securities, which may be described as bonds, pass-through securities, or collateralized debt obligations (CDOs). Investors are repaid from the principal and interest cash flows collected from the underlying debt and redistributed through the capital structure of the new financing. Securities backed by mortgage receivables are called mortgage-backed securities (MBS), while those backed by other types of receivables are asset-backed securities (ABS).Critics have suggested that the complexity inherent in securitization can limit investors' ability to monitor risk, and that competitive securitization markets with multiple securitizers may be particularly prone to sharp declines in underwriting standards. Private, competitive mortgage securitization is believed to have played an important role in the U.S. subprime mortgage crisis.In addition, off-balance sheet treatment for securitizations coupled with guarantees from the issuer can hide the extent of leverage of the securitizing firm, thereby facilitating risky capital structures and leading to an under-pricing of credit risk. Off-balance sheet securitizations are believed to have played a large role in the high leverage level of U.S. financial institutions before the financial crisis, and the need for bailouts.The granularity of pools of securitized assets can mitigate the credit risk of individual borrowers. Unlike general corporate debt, the credit quality of securitized debt is non-stationary due to changes in volatility that are time- and structure-dependent. If the transaction is properly structured and the pool performs as expected, the credit risk of all tranches of structured debt improves; if improperly structured, the affected tranches may experience dramatic credit deterioration and loss.Securitization has evolved from its beginnings in the late 18th century to an estimated outstanding of $10.24 trillion in the United States and $2.25 trillion in Europe as of the 2nd quarter of 2008. In 2007, ABS issuance amounted to $3.455 trillion in the US and $652 billion in Europe. WBS (Whole Business Securitization) arrangements first appeared in the United Kingdom in the 1990s, and became common in various Commonwealth legal systems where senior creditors of an insolvent business effectively gain the right to control the company.
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