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Risk magazine

SG CIB launches timer options

Société Générale Corporate and Investment Banking (SG CIB) has developed a new type of option that allows buyers to specify the level of volatility used to price the instrument. Timer calls are designed to give investors more flexibility and ensure they…

Loan portfolio value

Using a conditional independence framework, Oldrich Vasicek derives a useful limiting form for the portfolio loss distribution with a single systematic factor. He then derives a risk-neutral distribution suitable for traded portfolios, and shows how…

A telling scope

The number of technical articles submitted each year to Risk has stabilised at around 90, and a high proportion of them are still about credit derivatives and credit portfolio risk analysis. In fact, in our Cutting Edge pages and behind the scenes we…

The probability approach to default probabilities

Default estimation for low-default portfolios has attracted attention as banks contemplate the requirements of Basel II's internal ratings-based rules. Here, Nicholas Kiefer applies the probability approach to uncertainty and modelling to default…

Pricing with a smile

In the January 1994 issue of Risk, Bruno Dupire showed how the Black-Scholes model can be extended to make it compatible with observed market volatility smiles, allowing consistent pricing and hedging of exotic options