1) Give an overview and explanation of this class of bonds (research and report on the concept of Disaster Bonds). What are these bonds? When were catastrophe bonds first issued and how has the market developed over time?
2) Discuss how these bonds relate to the concepts of systematic (market) risk and idiosyncratic risk and interest-rate risk.
3) Also, discuss how these bonds relate to the Theory of Asset Demand. Who would buy these bonds and why? What benefit are they getting? Who would issue these bonds? What types of businesses or government institutions might benefit from issuing these bonds. Why?
4) Compare and contrast catastrophe bonds to more common types of bonds. What advantages and disadvantages do these bonds have compared to other bonds?
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