We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Disaster Bonds/Catastrophe Bonds - Term Paper Example

Comments (0) Cite this document
Disaster Bonds/Catastrophe Bonds Introduction Economics is fundamentally described as an area of study that is mainly concerned with the creation, utilization and transfer of wealth. Correspondingly, the idea of macro economics is principally described as the branch of economics emphasizing on studying the approach of decision-making for the upliftment of an economy…
Download full paper
Disaster Bonds/Catastrophe Bonds
Read TextPreview

Extract of sample
Disaster Bonds/Catastrophe Bonds

Download file to see previous pages... This is owing to the reason that these bonds are viewed to be risk-related securities which tends to uplift the position of an economy by raising huge amount of money during any sort of catastrophe such as the occurrence of floods, earthquakes and hurricanes among others (Coval, Jurek & Stafford, 2008). In this paper, a brief overview and a detailed explanation about this class of bonds, i.e. catastrophe bonds will be taken into concern. Moreover, the interrelation of these bonds with the conceptions of systematic (market) risk and idiosyncratic risk along with interest-rate risk will be considered. Various aspects that include the association of CAT bonds with the Theory of Asset Demand and comparison of these bonds with more common types of bonds and a comprehensive explanation about the advantages along with the disadvantages possessed by the aforementioned bonds will also be discussed in the paper. 1) Overview and Explanation of Disaster or Catastrophe (CAT) Bonds Disaster or Catastrophe (CAT) Bonds are usually regarded as high yield and risk-associated debt instruments or securities that are largely executed with the motive of raising money in the occurrence of catastrophes such as hurricanes, floods and earthquakes and other natural calamities. In general, these bonds can be typically characterized as high-yield debt appliances that are normally insurance-connected and are used to raise huge amount of money during the occurrence of any sort of catastrophe. It has been apparently observed in this context that these sort of bonds posses a special condition which represents that if a particular issuer i.e. an insurance or a reinsurance company experiences any loss from a specific catastrophe, the debt of the issuer concerning the payment of interest or the principal repayment figure is either totally overdue or completely forgiven (Coval, Jurek & Stafford, 2008). The prime intention of CAT bonds has been identified as transferring the risk caused by any kind of catastrophe particularly from the insurance industry towards capital markets. It has been viewed in this regard that these sorts of bonds are commonly used in various advanced nations with the intention of mitigating the issues or problems resulting from the occurrence of catastrophes. The CAT bonds became quite popular in certain business markets that comprise Europe, United States and Japan among others. However, in common instances, it has been the insurers who broadly execute theses bonds as a substitute towards reinsurance. It is in this context that the different insurance or reinsurance organizations issue these kinds of bonds and place them in front of different investors. This activity of the insurance or reinsurance organizations ultimately helps them towards transferring certain proportion of risks to those investors. In this regard, the various insurance or reinsurance companies can further endow a substantial proportion of their invested amount in any other financial sphere by selling CAT bonds. It is the government or the different financial institutions that possess the authority of issuing these bonds by a considerable extent (Coval, Jurek & Stafford, 2008). In order to analyze CAT bonds, it has been apparently observed that these bonds were initially introduced or issued in the midst of 1990s, during the repercussion of ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Disaster Bonds/Catastrophe Bonds Term Paper Example | Topics and Well Written Essays - 2500 words”, n.d.)
Retrieved from https://studentshare.org/macro-microeconomics/1403991-disaster-bonds-catastrophe-bonds
(Disaster Bonds/Catastrophe Bonds Term Paper Example | Topics and Well Written Essays - 2500 Words)
“Disaster Bonds/Catastrophe Bonds Term Paper Example | Topics and Well Written Essays - 2500 Words”, n.d. https://studentshare.org/macro-microeconomics/1403991-disaster-bonds-catastrophe-bonds.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
History of the Chernobyl Catastrophe
It is recorded to be at a scale ten times the magnitude of the atomic bomb explosion of Hiroshima and Nagasaki at the end of the Second World War (Brack 71). The explosion had a tremendous effect on the people living in the region as well as people living in nearby countries.
8 Pages(2000 words)Term Paper
Callable Bonds
Because of their nature bonds, are generally simple and safe. However, we have different types of bonds, and one of them is callable bond, which differs slightly with regular bond. According to Frykman and Tolleryd, callable bonds consist of “double life” thus, they are complicated compared to the regular bond and investors have to be more careful when investing in them (173).
12 Pages(3000 words)Term Paper
European causes of its 2012 economic crisis
According to the paper, some peripheral European countries failed the strict execution and enforcement of the EU conditions. These nations accrued big losses and increased public debts. Access to funds at minimal interest rates and poor imposition of EU regulations regarding debit limits facilitated the onset of s European sovereign debt dilemma.
6 Pages(1500 words)Term Paper
Disaster Recovery Plan
“The stock markets in New York have reopened after their longest closure since 9/11due to the super storm Sandy... NYSE said it is using backup generators - for the first time - because power is out in much of downtown Manhattan.” (BBC News, 2012) The disasters in financial services industry create confidence crisis among the public and the industry needs to be prepared in all circumstances to avoid disasters and ready with business continuity plans.
6 Pages(1500 words)Term Paper
Case study-bp struggles to resolve sustainability disaster-Ethic paper
There was an unabated flow of crude for about three months in the Gulf of Mexico and daily over 53,000 barrels of oil polluted the Gulf of Mexico affecting the estuaries, beaches, wetlands and the habitat of the adjoining areas. Over 200 sq km area near the Deepwater Horizon oil rig where the disaster took place was declared ‘kill zone’ by the experts because it has damaged the ecosystem of the region and the death rate of the living species of the region multiplied several times.
6 Pages(1500 words)Term Paper
Disaster recovery plan
The prime business goal as well as objective of Cisco is to generate greater value towards its worldwide customers, personnel, financial investors and most significantly ecosystem partners. It has been viewed that the organization is quite concerned about producing as well as delivering quality networking products as well as services throughout the globe with the intention of accomplishing superior competitive position.
6 Pages(1500 words)Term Paper
Disaster Recovery Plan (Information Systems)
Sophisticated systems carry with them, the inherent risks of malfunction or serious damage, either by chance or by intent, at times by known sources and more often from unknown sources. Minor glitches can be managed, but the need for a well thought out
13 Pages(3250 words)Term Paper
Investing in stocks and bonds
We will discuss in this paper the benefits of bonds and stocks between high and low risk, as well as their profits and
3 Pages(750 words)Term Paper
Reserch Disaster Bonds (also known as CAT bonds or catastrophe bonds)
CAT bonds are insurance related and are meant to raise money to cover a disaster, with specific condition connecting the insurance company and the insured, in terms of payment procedures. The insurers and investors stand a chance to lose in case of a catastrophe. It
8 Pages(2000 words)Research Paper
Disaster Recovery Plan
of a Disaster Recovery Plan is to provide a written and tested plan directing the computer system recovery process in the event of an interruption in continuous service resulting from an unplanned and unexpected disaster (Omar, Alijani, & Mason, 2011). Incident Management Group
6 Pages(1500 words)Term Paper
Let us find you another Term Paper on topic Disaster Bonds/Catastrophe Bonds for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us