's option value, even after compensating a lender for expected default losses. This non-neutrality of debt arises from an … risks, and lowers the investment threshold. Compensating the lender for expected default losses reduces project …

-spread default affects the banking system. We find that the interaction of credit, asset prices, and loan losses explains a complete … deteriorate, an asset price decline causes default among leveraged firms, and banks suffer loan losses. Their size determines …

falling asset prices affect the banking system through wide-spread borrower default, while deriving explicit solutions and … through’ the bank balance sheet; once borrowers default, asset prices drive bank capital, and constrained credit in turn …

reorganization or liquidation if the value of the firm falls below a certain threshold. In the event of default, however, many …

partial government default and steep devaluation. However, the economy responded with relief to the crisis-related easing of …

The use of crop yield futures contracts is examined. The expectation being modeled here reflects that of an Illinois … corn and soybeans producer at planting, of revenue realized at harvest. The effects of using price and crop yield contracts … alternatives: 1) a revenue hedge using just price futures, 2) a revenue hedge using crop yield futures, 3) an unhedged scenario …