The new capital adequacy framework (Basel II) is one of the most fiercely debated topics the financial sector has seen in the recent past. Following a consultation process that lasted several years, the regulations formally took effect on January 1, 2007. The advanced approaches (the advanced...

The paper deals with two particular investment decisions: optimizing the investment date and opitmizing a single identical replacement. The objective is to maximize the net present value. For the common and convenient assumption of a flat term structure of inetrest rates, two results are known....

As a consequence of the suspicion that margin loans had been a key element of the stock market boom and crash in the late 1920s, the Federal Reserve Bank was empowered to regulate margin lending with the Securities and Exchange Act. However, there exists no formal rationale for the regulation of...

The new Basel II Capital Accord has been one of the financial sector’s most fiercely discussed topics in the recent past. After many years’ debate, the regulations formally took effect on January 1, 2007, and the advanced measurement approaches are scheduled to become fully operational on...