Monday, June 29, 2009

Hedging Real-Estate Risk (Fabozzi, Shiller & Tunaru)

Abstract:
Real-estate assets represent more than one-third of the value of all the underlying physical capital in the United States and the world. The relationship between the level of interest rates and housing prices does not always follow one direction and a shock event in one market may trigger deep repercussions in the other. With the spread of the securitization process, the risks rooted in these two fundamental markets can have far reaching outcomes. The paper can be downloaded here.

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