Credit Risky Securities Valuation under a Contagion Model with Interacting Intensities

We study a three-firm contagion model with counterparty risk and apply this model to price defaultable bonds and credit default swap (CDS). This model assumes that default intensities are driven by external common factors as well as other defaults in the system. Using the “total hazard” approach, de...

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Bibliographic Details
Main Authors: Anjiao Wang, Zhongxing Ye
Format: Article
Language:English
Published: Wiley 2011-01-01
Series:Journal of Applied Mathematics
Online Access:http://dx.doi.org/10.1155/2011/158020
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