Pricing of defaultable bonds with log-normal spread: Development of the model and an application to Argentinean and Brazilian bonds during the Argentine crisis

In this paper we describe a two-factor model for a defaultable discount bond, assuming log-normal dynamics with bounded volatility for the instantaneous short rate spread. Under some simplified hypothesis, we obtain an explicit barrier-type solution for zero recovery and constant recovery. We also p...

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Autor principal: De Estrada, M.C
Otros Autores: Cortina, E., Fontán, C.F, Fiori, J.D
Formato: Capítulo de libro
Lenguaje:Inglés
Publicado: 2005
Acceso en línea:Registro en Scopus
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