Revenue Rise with Loans

Mean–variance analysis, made popular by Markowitz and Sharpe, has been the basis for the process of portfolio optimization since the 1990s. Yet, the method itself suffers from various pitfalls. Among others it ignores deviations of the return distributions from normality. The asymmetric risk profile of corporate bonds and the illiquidity of certain segments of the [...]

Having discussed some of the most influential economy-wide factors for the performance of corporate bonds, we will now examine specific indicators for the state of the US corporate sector. Traditional metrics of leverage focus on the debt-to-equity ratio. The rationale behind this is that a company’s assets are funded by a combination of debt and [...]