Purpose – The purpose of this paper is to examine the risks caused by “hazardously immoral” contracts which force external parties to bear significant losses without their consent. Design/methodology/approach – The expectation of substantial future losses raises the question of how...

Purpose – The purpose of this paper is to critically analyze the common assumption, made by many credit risk models such as the Moody's KMV Loss‐Calc model, of a β distribution for the loss‐given default (LGD). The paper shows that this assumption does not perform well in constructing...

Purpose – The purpose of this paper is to examine the asymmetric dynamic rotation of beta coefficients to global investment style factor shocks in the Morgan Stanley Capital International (MSCI) universe of assets and its implications for investment management. Design/methodology/approach –...

Purpose – The paper aims to examine the practical importance of the finding of Mayers and Smith, that underinvestment is a problem when debt exposed to bankruptcy is part of the financial structure. Design/methodology/approach – The paper examines critically the assumptions underlying the...

Purpose – The aim of this paper is to examine the accuracy of GARCH and provide a comparison of GARCH‐type and the other time series models in financial commodity markets. Design/methodology/approach – First, a model fitting is performed to choose suitable models with conditional...

Purpose – The purpose of this paper is to assess the financial literacy of the UAE individual investors who invest in the local financial markets. In addition, it examines the relationship between financial literacy and the influence of the factors that affect the investment decision....

Purpose – The purpose of this paper is to empirically examine the extent at which idiosyncratic and financial market uncertainty affect the UK private manufacturing firms' investment decisions. Design/methodology/approach – A firm‐level panel data covering the period from 1999 to 2008...

Purpose – Demonstrates the feasibility of, and introduces a practical approach to enhancing, reinsurance efficiency using index‐based instruments. Design/methodology/approach – First reviews the general mathematical framework of reinsurance optimization. Next, illustrates how index‐based...