With respect to corporate governance, what are the mechanisms that can mitigate the likelihood that management will act in its own self-interest?
Answer to relevant QuestionsWhy is credit risk modeling more difficult than interest-rate modeling? What is the drawback of the default correlation measure and what alternative measure is used in measuring portfolio credit risk? Explain how the Black-Scholes-Merton model has been extended to allow for multiple bond issues in a corporation’s debt structure. The following is reproduced from the Prospectus of the T. Rowe Price Institutional Core Plus Fund dated October 1, 2010: “Principal Investment Strategies: The fund intends to invest at least 65% of its net assets in a ...This excerpt comes from an article titled “Eagle Eyes High-Coupon Callable Corporates” in the January 20, 1992, issue of BondWeek, p. 7: “If the bond market rallies further, Eagle Asset Management may take profits, ...
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