Elizabeth Tashjian

Curriculum Vitae

Elizabeth  Tashjian
  • Director Undergraduate Finance Program, Finance Department
  • Associate Professor, Finance Department

Research

Research Summary

Financial distress; Investments with an emphasis on contingent claims processing and security contract design; Visualization

Research Statement

My research has focused on the subtle features of two types of securities: debt contracts and futures contracts. A debt contract or a futures contract can be defined quite simply: a debt contract is an agreement to repay a lender a specified amount of money on a specific date or dates and a futures contract may be defined as an agreement to buy an asset at a specific date in the future at a negotiated price. In practice, these contracts contain many features that influence pricing and outcomes.

My work on debt contracts explores empirically the outcomes of firms experiencing financial distress. The debt renegotiation process can be viewed as a bargaining problem between the debtor corporation and its creditors, where the outcome depends on the complexity of the bargaining problem and the incentives of the parties to settle or hold out for better terms. In this context, a workout represents a consensual solution between the debtor and a sufficiently large coalition of creditors. Since failure to achieve a workout generally results in a bankruptcy filing, the bargaining environment is shaped by the threat of and rules governing bankruptcy. My recent work explores how both economic factors and legal factors influence bankruptcy outcomes for distressed firms. I am also interested in how bankruptcy influences the trading partners of distressed firms.

Futures contracts contain a complex combination of a simple futures contract and assorted options, giving the contracts' participants significant flexibility in satisfying the terms of the contract. Most of my research in futures contracts involves exploring why these features exist either theoretically or empirically.