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Insurance Options: Beating the Benchmark. Are Catastrophe Bonds more profitable than Corporate Bonds?
- Source :
-
Revista de Metodos Cuantitativos para la Economia y la Empresa . Jun2020, p3-17. 15p. - Publication Year :
- 2020
-
Abstract
- In this paper, we establish a comparison between one of the most traded financial derivatives in the markets, the so-called catastrophe bonds (abbreviated as cat bonds) and the corporate bonds. In the first section, we start from a brief definition as well as some basic concepts. In section two, we will enumerate the type of investors to whom these products might interesting and how to price them. Afterwards, in section three we move onto the analysis of the trading rule proposed, that is, the comparison with Corporate bonds, our benchmark, in terms of expected returns. In sections four and five, we will point out some key issues on how the credit risk associated to these products can be reduced and, finally, in the last section, we will conclude with some discussions and remark the state-of-the-art research on this field. [ABSTRACT FROM AUTHOR]
- Subjects :
- *CATASTROPHE bonds
*CORPORATE bonds
*DERIVATIVE securities
*INSURANCE
*CREDIT risk
Subjects
Details
- Language :
- English
- ISSN :
- 1886516X
- Database :
- Academic Search Index
- Journal :
- Revista de Metodos Cuantitativos para la Economia y la Empresa
- Publication Type :
- Academic Journal
- Accession number :
- 143622029
- Full Text :
- https://doi.org/10.46661/revmetodoscuanteconempresa.2978