How to Read Credit Derivatives and Synthetic Structures: A Guide to Instruments and Applications Kindle
The Original Credit Derivatives Bible This eTextbook edition is a print replica of credit derivatives expert Janet Tavakoli’s finance classic, Credit Derivatives and Synthetic Structures (Second Edition 2001). Tavakoli’s iconic book is referenced by law firms, Congress, and scholarly publications. This electronic version’s text page numbers are identical to those used in public references. The remastered eBook has been optimized for the best possible screen view of the text in its original form and will appear on your reading devices as normal text. A comprehensive first look at the initial explosion of the credit derivatives market as growing investments and risk management mechanisms.Credit derivatives revolutionized the financial industry and changed the way banks, institutional investors, and securities traders do business both domestically and globally. Credit derivatives expert Janet Tavakoli explains how these instruments were developed, their relative value, and their tricks and traps. Although this book was published in 2001, it is the only source that explains the various ways these instruments can be mishandled. Almost two decades later, it is as useful as when it was first written. Credit derivatives create opportunities, but they are riddled with pitfalls. Tavakoli explains what works, and more importantly, what does not work. She provides a guide on how to manage and control the various risks using real world examples based on her extensive experience.Tavakoli describes a wide range of products and valuation techniques that are particularly important in the current market as well as how to manage risks for the essential instruments: * Language issues for confirmations and term sheets and how to fix them.* Information Asymmetry and what to do about it* Total Rate of Return Swaps (TRORS)-receiver and payer motivation, mismatched maturities, balance sheet management, loan TRORS mechanics* Credit default swaps and options-basis risk, materiality, price adjustments, termination payments, normalized price method, pricing and applications* Exotic structures*Asset swap switches* Synthetic lending facilities* Prorata default structures* Basket default swaps* Basket default options* Currency convertibility* Sovereign Credit Default Swaps* Credit Linked Notes (CLNs)-reasons for CLNs, black box structures, collateralized loan obligations, hybrid securitizations* Sovereign risk and emerging markets-tax arbitrage, cross border issues, special event risks, pricing convertibility protectionAnd much more
