Open Access. Powered by Scholars. Published by Universities.®
Social and Behavioral Sciences Commons™
Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 1 of 1
Full-Text Articles in Social and Behavioral Sciences
The Effect Of Leverage On Credit Default Swaps, Xiling Lai
The Effect Of Leverage On Credit Default Swaps, Xiling Lai
Undergraduate Student Research Internships Conference
The research investigates the effect of leverage on the pricing of Credit Default Swaps (CDS) and focuses on key sectors of the economy: Technology, Financials, Consumer Staples and Industrials. CDS are financial instruments that were developed a few decades ago and have become more widely used in financial markets for hedging credit exposures. Given their prevalence in financial markets, it is important to understand how CDS spreads change when reference entities modify their capital structure.
In the regression analysis, the level of CDS spread is used as dependent variable, and the standardized relative leverage is used as independent variable. My …