Bond Risk

Some lending institutions penalize borrowers who retire their loans early. In the United States, prepayment penalties are levied only for commercial mortgages, not for residential ones (both are penalized in the United Kingdom). Residential lenders, therefore, cannot be certain of the cash flows they will receive. This is known as prepayment risk. The uncertainty of mortgages cash flows, and the risk associated with it, is passed on to the securities backed by the loans. In this way, an MBS is similar to a callable bond, with the call exercisable at the discretion of the borrowers, and, as will be explained later, it can be valued using a similar pricing model. 

An investor acquiring a pool of mortgages from a lender measures the amount of associated prepayment risk by using a financial model to project the level of expected future payments. Although it is impossible to evaluate with any accuracy the prepayment potential of an individual mortgage, such analysis is reasonable for a large pool of loans. This is similar to what actuaries do when they assess the future liability of an insurer that has written personal pension contracts. The level of prepayment risk for a pool of loans is lower than that for an individual mortgage. 

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Long credit risk (i.e., long the bond risk) Short credit risk (i.e., short the bond risk) CDS spread is higher than the asset swap level CDS spread is lower than the asset swap level Long asset and long protection Short asset and short protection Long-credit risk Short-credit risk... 

Cinnamic acid can be readily esterified by the Fischer-Speier method without any risk of the addition of hydrogen chloride at the double bond. Proceed precisely as for the preparation of ethyl benzoate (p. 104), using 20 g. of cinnamic acid and 20 ml. of rectified spirit. When the crude product is poured into water, a sharp separation of the ester is not readily obtained, and hence the addition of about 10 ml. of carbon tetrachloride is particularly desirable. Finally distil off the carbon... 

If it is assumed that available interest rates offered by banks, government, etc., for no-risk investment of capital are 10 percent, then the maximum economic market price of 100 stock units in this hypothetical company is about 117. If all the debt is in bonds, etc., earnings on ordinaiy stock would be 10 cents per dollar of net worth, and the maximum economic price of the stock would be about 100 unless stock prices were expected to rise. 

The additional assembly proeess risk, Up, is eonsidered in isolation after the handling and fitting operations, questioning the assembly situation of a eomponent after initial plaeing, and whieh requires further proeessing, for example welding or adhesive bonding. Therefore, beeause additional assembly proeesses are performed after initial part plaeement, simply defaults to ap when it is eonsidered in the assembly sequenee ... 

Repair. Repairs for damaged bonded structure can be either mechanical or adhesively bonded. Mechanical repairs are metallic doublers on one or both sides of a damaged component, held on by fasteners. The fasteners transfer the load through the doubler around the damaged site and restore part functionality. Although common for metal-to-metal bonded structure, mechanical repair of sandwich structure is rare because of the risk of further delamination. Unless the doubler and fasteners are perfectly sealed, water can travel into the honeycomb core eventually causing freeze-thaw damage and delamination. 

Local repair of bonded structure damage from mechanical sources (bird-strike, equipment impact, etc.) can either be bonded or mechanically fastened patches. In general it is more likely that sandwich structure is repaired using bonded patches because of the limited compression capability of sandwich structure and the risk of introducing water into the honeycomb from penetrating fasteners. 

An alternate method involved pre-machining the core detail to contour while it was stabilized in a frozen block of water or other medium. This entailed the expense and time to freeze the block and keep it frozen during machining as well as the risk of contaminating the core bond surfaces. In addition it was difficult to maintain the dimensional tolerances necessary to match the spar dimensions to the core adequately. Both spar and core details had machining tolerances and significant hand sanding of the core was often required to match the details. 

Galvanised steel provides increased corrosion resistance in carbonated concrete. In concrete with more than 0.4% chloride ion with respect to the cement content, there is an increased risk of corrosion and at high chloride contents the rate of corrosion approaches that of plain carbon steel. In test conditions the rate of corrosion is greater in the presence of sodium chloride than calcium chloride. Fusion-bonded epoxy-coated steel performs well in chloride-contaminated concrete up to about 3.9% chloride ion in content. 

Safety Bond a bond connecting the metallic carcase of a piece of electrical apparatus with earth, in order to limit the rise in potential of the carcase above earth caused by the passage of any fault current or excessive leakage current, and so reduce the risk of electric shock to anyone touching the carcase. 

Further oxidation of the product to a carboxylic acid (Section 19.6) can be avoided by using a mild oxidizing agent. There is less risk of further oxidation for ketones than for aldehydes, because a C—C bond would have to be broken for a carboxylic acid to form. 

Moreover, it has been noticed that in clinical applications, devices such as catheters, which have to pass through the skin from the outside to the interior of the body. It always exposes the patient to the risk of infection. Because there are dead space between the catheter surface and the surrounding tissue, the bacteria can enter the body along the device surface in direct contact with the skin. Such dead space would not be formed if the material surface were able to bond to the skin tissue at the microscopic level. 

Criterion C2 takes into account criterion C as well as the enthalpy of combustion of the compound. This criterion is the result of the observation that compounds of simiiar enthalpies of decomposition and combustion are the only ones that present a risk bonded to instability. 

When analysing the labelled contents, apart from code 6, which is ambiguous since the risk is bonded to the presence of air, the other codes are obviously instability codes. Nevertheless, their definitions seem to lack accuracy and coherence. Indeed,... 

Only strong oxidants can react dangerously with saturated esters. Unsaturated esters have often been involved, but the reaction mainly concerns non-saturation the ester group can increase the risk by boosting the double bond reactivity. Therefore, reference to unsaturated esters will be concerned with this type of reaction. 

The CO-X bond breaking is the result of an electrophilic attack (on the carbonyl oxygen atom, hence the catalytic role of acids in these rupture reactions) or a nucleophilic one (on the carbonyl carbon atom whose positive property is due to the X electron-withdrawing property). The dangers of this type of reaction come from its speed and high exothermicity and/or instability of the products obtained in some cases. The accidents that are described below can make one believe that acid anhydrides in general and acetic anhydride in particular represent greater risks than acid chlorides since they constitute the accident factor of almost all accidents described. This is obviously related to their frequent use in synthesis rather than acid chlorides, that are rarely used. 

The NFPA reactivity codes indicate the risks that are related to the propensity for polymerisation and/or instability of the nitrile group and of the potential ethylene double bond. The table below gives the available data with some contradictions between different sources, as usual (for acetonitrile, code 1 seems to make more sense)... 

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