type="main" xml:lang="en" <p>This paper uses three basic results to address three problems. The first problem concerns the pricing of corporate bonds, when in the event of default the claim of the bond holders is on the principal of the bond plus accrued interest. The second concerns the pricing of...</p>

type="main" xml:lang="en" <p>Given the objective of maximizing the wealth of existing shareholders, this paper discusses some of the issues that arise in attempting to measure the performance of individual businesses within a bank. The paper describes two return measures – return on assets within...</p>

This paper examines the pricing of loans using the term structure of the probability of default over the life of the loan. We describe two methodologies for pricing loans. The first methodology uses the term structure of credit spreads to price a loan, after adjusting for the difference in...