We develop a finite horizon continuous time market model, where risk averse investors maximize utility from terminal wealth by dynamically investing in a risk-free money market account, a stock, and a defaultable bond, whose prices are determined via equilibrium. We analyze the endogenous interaction arising between the stock and the defaultable bond via the interplay between equilibrium behavi...

In this paper we study the pricing and hedging of a very general class of life insurance liabilities by means of the risk-minimization approach. We find the price and risk-minimizing strategy in two cases, first in the case when the financial market consists only of one risky asset, e.g. a stock, and a bank account, and second in an extended financial market, allowing for investments in two add...

We study the impact of shareholder-initiated litigation risk on a firm's stock price crash risk. Our empirical analysis takes advantage staggered adoption universal demand laws, which led to an exogenous decline in derivative find that threat reduces and information hoarding associated with earnings management is channel through affects The relationship also moderated by how exposed firms are o...