Hot answers tagged valuation
You will find elaborate answers to your question in this excellent new book: Quantitative Value: A Practitioner’s Guide to Automating Intelligent Investment and Eliminating Behavioral Errors by Gray & Carlisle You can find a good summary over at CXO Advisory Group: A Few Notes on Quantitative Value
If you don’t have any market quotes, one possible way to assess the credit risk of a company is to use its financial statement information in order to infer the corporate rating that credit agencies might have assigned to such company. For instance, in this paper you can find the general criteria that S&P use to derive the credit rating of a company ...
If you assume that you do not have any market risk (a strange assumption, but it would hold for example if you are fully hedged), then a (correctly) collaterlized derivative does not have any net future cash flow. Clearly: if the derivative contract has a cash flow of -X, its value will go down by X and the collateral account will have a cash flow of +X (the ...
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