I totally understand your CDS valuation spreadsheet. But I have one question regarding the structure of the CDS.
To simplify, I assume
buyer = some fund who purchases the CDS from the CDS sellser
seller = insurance companies who offer CDS protection
In order to calculate the premium...
In 6a page 13, you give us an example
Originator = HSBC
Servicer = JP Morgan
Arranger = Countrywide Financial
Step1. HSBC first lends me (a borrower) money to buy a house (a mortgage contract has been signed)
Step2. HSBC hires Countrywide Financial to repackage those mortgage contracts...
on Book 1 Study note page 48/60, you mentioned that the company can borrow against assets rather than against future project in order to reduce the cost of managerial discretion?
What does that mean?
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