Is Systematic Default Risk Priced in Equity Returns? a Cross-Sectional Analysis Using Credit Derivatives Prices

Author/creator Chan-Lau, Jorge A. Author
Format Electronic
Publication InfoWashington : International Monetary Fund
Supplemental ContentFull text available from Ebook Central - Academic Complete

Summary Annotation This paper finds that systematic default risk, or the event of widespread defaults in the corporate sector, is an important determinant of equity returns. Moreover, the market price of systematic default risk is one order of magnitude higher than the market price of other risk factors. In contrast to studies by Fama and French (1993, 1996 ) and Vassalou and Xing (2004), this paper uses a market-based measure of systematic default risk. the measure is constructed using price information from credit derivatives prices, namely the spreads of standardized single-tranche collateralized debt obligations on credit derivatives indices.
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Technical detailsMode of access: World Wide Web
Genre/formElectronic books.
ISBN9781452702544
ISBN1452702543 (E-Book) Active Record
Stock number00013468

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