How Long to Read Debt Dilution and Sovereign Default Risk

How Long Does it Take to Read Debt Dilution and Sovereign Default Risk?

It takes the average reader and 28 minutes to read Debt Dilution and Sovereign Default Risk by Mr.Leonardo Martinez

Assuming a reading speed of 250 words per minute. Learn more

Description

We propose a modification to a baseline sovereign default framework that allows us to quantify the importance of debt dilution in accounting for the level and volatility of the interest rate spread paid by sovereigns. We measure the effects of debt dilution by comparing the simulations of the baseline model (with debt dilution) with the ones of the modified model without dilution. We calibrate the baseline model to mimic the mean and standard deviation of the spread, as well as the external debt level, the mean debt duration and a measure of default frequency in the data. We find that, even without commitment to future repayment policies and withoutcontingency of sovereign debt, if the sovereign could eliminate debt dilution, the number of default per 100 years decreases from 3.10 to 0.42. The mean spread decreases from 7.38% to 0.57%. The standard deviation of the spread decreases from 2.45 to 0.72. Default risk falls in part because of a reduction of the level of sovereign debt (36% of the face value and of 11% of the market value). But we show that the most important effect of dilution on default risk results from a shift in the set of government's borrowing opportunities. Our analysis is also relevant for the study of other credit markets where the debt dilution problem could be present.

How long is Debt Dilution and Sovereign Default Risk?

Debt Dilution and Sovereign Default Risk by Mr.Leonardo Martinez is 28 pages long, and a total of 7,224 words.

This makes it 9% the length of the average book. It also has 9% more words than the average book.

How Long Does it Take to Read Debt Dilution and Sovereign Default Risk Aloud?

The average oral reading speed is 183 words per minute. This means it takes and 39 minutes to read Debt Dilution and Sovereign Default Risk aloud.

What Reading Level is Debt Dilution and Sovereign Default Risk?

Debt Dilution and Sovereign Default Risk is suitable for students ages 8 and up.

Note that there may be other factors that effect this rating besides length that are not factored in on this page. This may include things like complex language or sensitive topics not suitable for students of certain ages.

When deciding what to show young students always use your best judgement and consult a professional.

Where Can I Buy Debt Dilution and Sovereign Default Risk?

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