This study proposes a new design of reset options in which the option's exercise price adjusts gradually, based on the amount of time the underlying spent beyond prespecified reset levels. Relative to standard reset options, a step‐reset design offers several desirable properties. First of...

Examines the overall effect of a state bond guarantee on state credit markets and individual municipalities. Analyzes the Texas School Bond Guarantee program and it's impact on the borrowing cost of school districts and other municipalities within the state.