Looks at the problem of endowment assurances that do not meet their targets to repay residential mortgages. By analysing the present value of payments under different inflation and interest‐rate regimes, we conclude that the perceived problems with endowment policies may simply be a...

Purpose – To address formally the issue of uncertainty in valuing real estate. Design/methodology/approach – Monte Carlo simulations are used to incorporate the uncertainty of valuation parameters. The probability distributions of the various parameters are constructed using empirical data...

Purpose – In investment decision making, the net present value (NPV) rule is often used alongside the well‐known capital asset pricing model (CAPM). In particular, the use of disequilibrium NPV is endorsed in corporate finance for both valuation and decision. The purpose of this paper is to...