Valuing mortgage insurance contracts in emerging market economies

Ashok Bardhan, Raša Karapandža, Branko Urošević

Research output: Contribution to journalArticlepeer-review


We develop a new option-based method for the valuation of mortgage insurance contracts in closed form in an economy where agents are risk neutral. While the proposed valuation method is general and can be used in any market, it may be particularly useful in emerging market economies where other existing methods may be either inappropriate or are too difficult to implement because of the lack of relevant data. As an application, we price a typical Serbian government-backed mortgage insurance contract.

Original languageEnglish (US)
Pages (from-to)9-20
Number of pages12
JournalJournal of Real Estate Finance and Economics
Issue number1
StatePublished - Feb 2006


  • Black-scholes formula
  • Default rate
  • Emerging markets
  • Mortgage insurance
  • Prepayment rate

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics
  • Urban Studies


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