Sentence examples for asset substitutions from inspiring English sources

Many CDOs allow for asset substitutions, as Bloomberg's reporting demonstrated so cogently.

That's because of a little problem called the "asset substitution effect".

There is a trade-off between the tax-debt shield and the utility cost of ex-post asset substitution.

Such securities cannot be replicated by conventional hedging strategies, and they also mitigate the asset substitution problem.

Secondly, managers acting in the best interest of shareholders may give rise to asset substitution by replacing low-risk assets with high-risk investments (Smith and Warner 1979).

Corporate hedging adds value to the firm by lowering the project's risk and accordingly diminishing agency costs which arise from the managerial incentive of asset substitution.

Campbell and Kracaw (1990) additionally contribute that also credible commitments to hedge (for example, obligated hedging of interest rate risks via debt covenants) reduce agency costs of debt by lowering the incentive to asset substitution.

Bank balance sheets are notoriously opaque and susceptible to asset substitution (easy swapping of high risk for low risk assets), so stress tests, tailored to the situation at hand, can provide clarity by openly disclosing details of the results and approaches taken, allowing trust to be regained.

We find that (i) contrary to existing results, step-up bonds are indeed able to mitigate the asset substitution problem, (ii) the use of a step-up feature can be a credible signal to overcome asymmetric information problems, and (iii) the optimal design as well as the conditions for the optimal use of step-up bonds is considerably different for the two explanations.

On the other hand, several authors have argued that this positive relationship can be explained by the fact that large firms tend to decrease the costs of Agency caused by problems relating to under-investment and to the substitution of assets.

Then the substitutions began.