Jarrow-Lando-Wang Model

The Jarrow-Lando-Wang Model is a financial model used to assess the risk of default on corporate bonds. It combines insights from credit risk and the pricing of bonds. Essentially, it helps investors understand how likely a company is to fail to make its debt payments and how that impacts the bond's value. The model accounts for various factors like interest rates and economic conditions to provide a more accurate picture of potential losses. This helps investors make informed decisions about buying or selling bonds based on their risk tolerance and market conditions.