Froot, Kenneth A.; Posner, Steven E. - In: The Geneva Risk and Insurance Review 27 (2002) 2, pp. 153-165
Financial instruments whose payoffs are linked to exogenous events, such as the occurrence of a natural catastrophe or an unusual weather pattern depend crucially on actuarial models for determining event (e.g., default) probabilities. In many instances, investors appear to receive premiums far...