A chemical approach to understand fragilities of glass-forming liquids

Fragility is viewed as a measure of the loss of rigidity of a glass structure above its glass transition temperature. It is attributed to the weakness of directional bonding and to the presence of a high density of low-energy configurational states. An a priori fragility function of electronegativities and bond distances is proposed which quite remarkably reproduces the entire range of reported fragilities and demonstrates that the fragility of a melt is indeed encrypted in the chemistry of the parent material. It has also been shown that the use of fragility-modified activation barriers in the Arrhenius function account for the whole gamut of viscosity behavior of liquids. It is shown that fragility can be a universal scaling parameter to collapse all viscosity curves on to a master plot.

Pricing credit derivatives

The financial crisis set off by the default of Lehman Brothers in 2008 leading to disastrous consequences for the global economy has focused attention on regulation and pricing issues related to credit derivatives. Credit risk refers to the potential losses that can arise due to the changes in the credit quality of financial instruments. These changes could be due to changes in the ratings, market price (spread) or default on contractual obligations. Credit derivatives are financial instruments designed to mitigate the adverse impact that may arise due to credit risks. However, they also allow the investors to take up purely speculative positions. In this article we provide a succinct introduction to the notions of credit risk, the credit derivatives market and describe some of the important credit derivative products. There are two approaches to pricing credit derivatives, namely the structural and the reduced form or intensity-based models. A crucial aspect of the modelling that we touch upon briefly in this article is the problem of calibration of these models. We hope to convey through this article the challenges that are inherent in credit risk modelling, the elegant mathematics and concepts that underlie some of the models and the importance of understanding the limitations of the models.