Question

Explain how CAT bonds work. 

   Explain how CAT bonds work.
Options, futures and other derivatives
Options, futures and other derivatives
John C. Hull 7th Edition
Chapter 25, Problem 13 ↓

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CAT bonds, or catastrophe bonds, are a type of insurance-linked security that allows insurers to transfer the risk of catastrophic events, such as natural disasters, to investors.  Show more…

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