Options price limits

As shown in previous sections, the credit spread on a corporate bond takes into account its expected default loss. Structural approaches are based on the option pricing theory of Black Scholes and the value of debt depends on the value of the underlying asset. The determination of yield spread is based on the firm value in which the default risk is found as an option to the shareholders. Other models proposed by Black and Cox (1976), Longstaff and Schwartz (1995) and others try to overcome the limitation of the Merton s model, like the default event at maturity only and the inclusion of a default threshold. This class of models is also known as first passage models . 

The lower limit on an options price depends on whether or not the underlying asset pays dividends. Remembering that intrinsic value can never be less than zero, the lower bound on the price of a call option on a non-dividend-paying security is given by (8.4). 

Before the late 1980s there were very limited options in terms of pharmaceuticals for the psychiatric patient. With the advent of fluoxetine (Prozac), which was first launched in Belgium in 1986, the whole area of neuroscience became of much greater interest, especially given the fact that it was an area which had been relatively neglected up until that point. Options for treatment are now much more varied and offer the psychiatrist and patient far more choice. This has come at a price though several drugs have had to be taken off the market while some remain available but with restricted use. In this... 

The preparation of IR by the use of Nd catalysts was already mentioned in the early patents on Nd-catalyzed diene polymerization [ 154,155,325,326, 472-477]. Because of the limited availability of IP monomer in the western world and due to non-competitive prices of IP the option of manufacturing IR by the application of Nd-catalysis has not been the focus of the rubber producing industry during the past decades. But as a consequence of short NR supplies and strong increases of NR prices the application of Nd catalysis to the polymerization of IP has attracted new interest. In this context the... 

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