We derive a simple formula for calculating the CDS spread implied by the bond market price. Using no-arbitrage argument, the formula expresses the bond implied CDS spread as the sum of bond price, bond coupon and Libor zero curve weighted by risky annuities. We show that the bond implied CDS spread is consistent with the standard CDS pricing model if the survival probabilities and recovery are ...

Previous research suggests that cigarette smoking is considered to be a major preventable risk to human health. One explanation for smoking, provided by the literature, is that it could be explained by differences in time preferences; smokers are considered to have higher discount rates, implying that they will demand higher compensation in order to postpone any consumption from the present to ...

In a two-period model with uncertainty about life expectancy, we analyze several measures which are typically included in a social security reform: tax incentives for private life annuities, a cut in the social security benefits and an increase in the social security tax. First, we look at the demand side and study the effects on old-age provision for a given annuity price. It is shown that tax...