id	author	title	date	pages	extension	mime	words	sentence	flesch	summary	cache	txt
absel-734	Yu, Bosco	Monte Carlo Simulation Analysis on the Costs Reduction Argument of Interest Rate Swaps	2014	10	.pdf	application/pdf	8039	334	60	In addition to the conventional assumptions, I make specific assumptions on the evolution of default free interest rate and the firm’s financial structure and payoff conditions of liabilities in developing my valuation model. Journal of Financial Economics, 3, 145-166. 265 Developments in Business Simulation and Experiential Learning, Volume 30, 2003 TABLE 1 REPRESENTATIVE VALUES OF DEFAULT RISKY FIXED AND FLOATING RATES For r = 3% σB = 3% Time to Maturity T = 2 d* σv XF MK 20 20 3.84 0.03 40 “ 3.84 0.04 50 “ 3.89 0.08 70 “ 4.82 0.96 100 “ 47 50 30 10 3.84 0.03 “ 20 3.84 0.03 “ 30 3.86 0.06 “ 50 5.05 1.23 Time to Maturity T = 10 20 20 3.52 0.65 40 “ 3.78 0.89 50 “ 4.08 0.29 70 “ 5.30 1.47 100 “ 16.07 13.13 30 10 3.51 0.64 “ 20 3.60 0.72 “ 30 4.24 0.46 “ 50 7.66 3.86 *d = debt / asset ratio in % 266 Developments in Business Simulation and Experiential Learning, Volume 30, 2003 TABLE 2 QUALITY SPREAD DIFFERENTIAL BETWEEN DEFAULT RISKY FIRMS UNDER LOW VOLATILITY OF DEFAULT FREE RATE For r = 3% σB = 1% Time to maturity = 2 Firm d	cache/absel-734.pdf	txt/absel-734.txt