Why do analysts of high-yield corporate bonds feel that the analysis should be viewed from an equity analyst’s perspective?
Answer to relevant QuestionsAnswer the below questions. (a) What is a maintenance test? (b) What is a debt incurrence test and when does it come into play? In analyzing the labor situation in an industry in which a corporate issue operates, what should the credit analyst examine? What is meant by default correlation? Explain how the Black-Scholes-Merton model has been extended to allow for multiple bond issues in a corporation’s debt structure. What are the limitations of using duration and convexity measures in active portfolio strategies?
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