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Content archived on 2024-05-07

Financial asset pricing with default risk

Objective



Research objectives and content
The objective of the project is to build analytical tools to price securities subject to credit / default risk. Credit risk is particularly important for financial products issued by firms or governments in emerging capital markets. Most pricing models so far have been built, in default-free frameworks and are biased when the possibility of default is introduced: theoretical prices do not match observed prices. The project will start with a review of the current state-of-the-art and will then try to design analytically tractable models able to value financial instruments properly and to replicate the prices and behaviour of securities traded in financial markets. The project will aim at practical applicability of the formulae while being theoretically consistent.
Training content (objective, benefit and expected impact)
The project will have a high training content as it includes the writing of a PhD thesis in Economics. The course requires attendance to regular seminars, yearly presentations of advancement in research, and it enables students to follow some chosen lectures in any relevant field. Links with industry / industrial relevance (22)
The project is very relevant to the banking industry and also to supranational institutions such as the EBRD or the EIB which invest in emerging financial markets. These institutions need tools to value securities with substantial default risk to manage their portfolios.

Fields of science (EuroSciVoc)

CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: The European Science Vocabulary.

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Programme(s)

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Topic(s)

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Call for proposal

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Funding Scheme

Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.

RGI - Research grants (individual fellowships)

Coordinator

UNIVERSITE CATHOLIQUE DE LOUVAIN
EU contribution
No data
Address
3,Place Montesquieu 3
1348 LOUVAIN-LA-NEUVE
Belgium

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Total cost

The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.

No data

Participants (1)

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