Question: please answer thank you Measure the default risk in your corporate bond portfolio. Here is how: 1. Download your portfolio from StockTrak into Excel 2.
please answer thank you Measure the default risk in your corporate bond portfolio. Here is how: 1. Download your portfolio from StockTrak into Excel 2. Find the credit ratings for each of your companies, and enter that into Excel next to each corporate bond. Google will help you find this. 3. Do a Google search to find historical default rates and recoveries, by rating grade. Add this information to a new tab on your Excel workbook. Historical recovery rates will often be given by industry. Historical default rates are given by credit rating. 4. For each of your bonds, calculate expected default percent loss as Expected Loss=default probability*(1- recovery rate). You will need to use the default rates and recovery rates that match each bond's rating. 4. Calculate the overall expected loss to your portfolio as the weighted average of the expected default percent loss. Use the market value of each position as the weights in your weighted average. Please upload your Excel files with default, ratings, and expected loss analysis here. Make sure you follow all the steps involved with getting to Portfolio Expected Loss. This is intermediate stuff so be proud of yourself! Measure the default risk in your corporate bond portfolio. Here is how: 1. Download your portfolio from StockTrak into Excel 2. Find the credit ratings for each of your companies, and enter that into Excel next to each corporate bond. Google will help you find this. 3. Do a Google search to find historical default rates and recoveries, by rating grade. Add this information to a new tab on your Excel workbook. Historical recovery rates will often be given by industry. Historical default rates are given by credit rating. 4. For each of your bonds, calculate expected default percent loss as Expected Loss=default probability*(1- recovery rate). You will need to use the default rates and recovery rates that match each bond's rating. 4. Calculate the overall expected loss to your portfolio as the weighted average of the expected default percent loss. Use the market value of each position as the weights in your weighted average. Please upload your Excel files with default, ratings, and expected loss analysis here. Make sure you follow all the steps involved with getting to Portfolio Expected Loss. This is intermediate stuff so be proud of yourself
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