New Structural Approach and Default Risk

2012; RELX Group (Netherlands); Linguagem: Inglês

10.2139/ssrn.2053377

ISSN

1556-5068

Autores

Arsalan Azami,

Tópico(s)

Banking stability, regulation, efficiency

Resumo

This paper investigates and developed credit risk models. Specifically, it focuses on the Merton model, its extensions model and the way to survey new structural approach. First, this paper describes Merton model. Second, reviews the first-passage model along with more focus on default point. Third, considers on the new structural approach which has been believe that if the firm’s value passes the threshold level b, the firm’s value will continue unless the value process crosses and spends an exogenous quantity of time Ҍ below. We want to develop Yildiray Yildirim model with focus on Parisian option.

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