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Breaking Through Risk Management, a Derivative for the Leasing Industry

Author

Listed:
  • Prado, Sylvain Michael

    (CAPCO)

  • Ananth, Ram

    (CAPCO)

Abstract

In the leasing industry the lessor faces the risk, at the end of the contract, of not being able to recover sufficient capital value from the resale of the asset. We propose a financial product to hedge residual value risk. Furthermore, we discuss the contribution of the derivative to risk management.

Suggested Citation

  • Prado, Sylvain Michael & Ananth, Ram, 2012. "Breaking Through Risk Management, a Derivative for the Leasing Industry," Journal of Financial Transformation, Capco Institute, vol. 34, pages 211-218.
    • Handle: RePEc:ris:jofitr:1501
    as

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    File URL: http://www.capco.com/capco-institute/capco-journal/journal-34-cass-capco-institute-paper-series-on-risk/breaking-through-
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    Citations

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    Cited by:

    1. Christoph Gleue & Dennis Eilers & Hans-Jörg Mettenheim & Michael H. Breitner, 2019. "Decision Support for the Automotive Industry," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 61(4), pages 385-397, August.

    More about this item

    Keywords

    Residual Value Risk; Credit Risk; Credit Derivatives; Factor Modeling; Copula;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • G13 - Financial Economics - - General Financial Markets - - - Contingent Pricing; Futures Pricing

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