Negative basis

Luotamo, M. Riihimaki, V. (1996) DECOS and NEG basis for an occupational standard. Tetrachloroethane. Arhete och Halsa, 28, 1-45... 

B. Lindell, Platinum, DECOS and NEG Basis for an Occupational Standard, Nordic Council of Ministers, 14 (1997), 10D11. 

The condition on a non-negative basis function is essentially a condition on the Zoo norm of the matrix of basis functions, introduced in the last chapter, maxt Ei b(t — i) < 1 which, because Sib(t — i) = 1, cannot be less than 1. 

If this difference is positive we have a positive basis, and it happens when credit derivates trade at higher prices than asset swaps. Otherwise, if the difference is negative we have a negative basis. Consider the following example of a positive basis trade for HERIM and TKAAV. For both bonds, we calculate the CDS spread which is equal to 86.3 for HERIM and equal to 88.6 for TKAAV. The CDS basis over the ASW spread determined before is equal to 46.8 for HERIM and equal to 49.5 for TKAAV. However, the basis illustrated in Figure 1.6 is different because CRVD measures them relative to the Z-spread, which is 50.7 for HERIM and 48 for TKAAV. The basis relative to the Z-spread is equal to 35.6 for HERIM and 40.6 for TKAAV. So, we note that either the ASW spread or the Z-spread can be used as the basis performance, giving a similar result and positive basis in both cases. 

An example would be that a protection buyer holding a fixed-rate risky bond and wishes to hedge the credit risk of this position via a credit default swap. However, by means of an asset swap the protection seller (e.g., a bank) will agree to pay the protection buyer LIBOR +/-spread in return for the cash flows of the risky bond. In this way the protection buyer (investor) may be able to explicitly finance the credit default swap premium from the asset swap spread income if there is a negative basis between them. If the asset swap was terminated, it is common for the buyer of the asset swap package to take the unwind cost of the interest rate swap. 

However, it is also possible that an investor may find that there is a negative basis. For example, the credit default swap spread is less than the asset swap level for a cash instrument issued by the same reference entity. This situation may arise in the markets ... 

Sell credit protection Buy credit protection Positive basis Negative basis Long-basis trade Short-basis trade ... 

Banks tried to hedge their exposure to super senior ABS CDO by buying credit protection from monoline insurers. The typical transaction involved a negative basis trade in which the bank would hold the super senior ABS CDO position, typically rated AAA and also buy credit protection from a monoline insurer. However, these hedges suffered from wrong way exposure of the monoline counterparty. The wrong way exposure exists because the counterparty s creditworthiness is lowest when the exposure is largest. 

On the date in question, the 10-year CDS for this reference entity was quoted as 96.8 bps, which is an example of a negative basis, in this case of-22 bps. 

Twenty percent is too low, since S A cf is positive at the end of year 5. Thirty percent is too large, since SAdcf is negative at the end of year 5, and is the case with 25 percent. The answer must be between 20 and 25 percent. Interpolating on the basis of 2 Adcf, the DCFRR = 23 percent. 

Preventive maintenance includes inspection, servicing and adjustment with the objective of preventing breakdown of equipment. This is appropriate for highly critical equipment where the cost of failure is high, or where failure implies a significant negative impact on safety or the environment. This form of maintenance can be scheduled on a calendar basis (e.g. every six months) or on a service hour basis (e.g. every 5,000 running hours). 

A Hbasis functions provides K molecular orbitals, but lUJiW of these will not be occupied by smy electrons they are the virtual spin orbitals. If u c were to add an electron to one of these virtual orbitals then this should provide a means of calculating the electron affinity of the system. Electron affinities predicted by Konpman s theorem are always positive when Hartree-Fock calculations are used, because fhe irtucil orbitals always have a positive energy. However, it is observed experimentally that many neutral molecules will accept an electron to form a stable anion and so have negative electron affinities. This can be understood if one realises that electron correlation uDiild be expected to add to the error due to the frozen orbital approximation, rather ihan to counteract it as for ionisation potentials. 

Ldwdin population analysis avoids the problem of negative populations or populations greater than 2. Some quantum chemists prefer the Ldwdin approach to that of Mulliken as the charges are often closer to chemically intuitive values and are less sensitive to basis set. 

VViberg and Rablen found that the charges obtained with the atoms in molecules method were relatively invariant to the basis set. The charges from this method were also consistent v it i the experimentally determined C-H bond dipoles in methane (in which the carbon is p isitive) and ethyne (in which the carbon is negative), unlike most of the other methods they examined. 

Corrections to the MP4/6-311G(d,b) Energy. Higher-level basis functions, if they are prudently chosen, should be better than lower-level functions. Thus the energy of, for example, a diffuse function, [MP2/6-311 - - G(d,p)] should be lower (more negative) than the same function in which diffuse electron density is not taken into account [MP2/6-31 lG(d,p)], provided that the levels of elecUon... 

All of the material in this text and most of chemistry generally can be understood on the basis of what physicists call the electromagnetic force Its major principle is that opposite charges attract and like charges repel As you learn organic chemistry a good way to start to connect structure to properties such as chemical reactivity is to find the positive part of one molecule and the neg ative part of another Most of the time these will be the reactive sites... 

Electrophoresis (Section 27 3) Method for separating sub stances on the basis of their tendency to migrate to a posi tively or negatively charged electrode at a particular pH... 

The reaction of a positively charged polyelectrolyte with a negatively charged polyelectrolyte produces a precipitate, forming the basis for a precipitation titration. This paper provides an overview of colloid titrations, discussing... 

Acid-C t lyzed Chemistry. Acid-catalyzed reactions form the basis for essentially all chemically amplified resist systems for microlithography appHcations (61). These reactions can be generally classified as either cross-linking (photopolymerization) or deprotection reactions. The latter are used to unmask acidic functionality such as phenohc or pendent carboxyhc acid groups, and thus lend themselves to positive tone resist apphcations. Acid-catalyzed polymer cross-linking and photopolymerization reactions, on the other hand, find appHcation in negative tone resist systems. Representative examples of each type of chemistry are Hsted below. 

---