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Under the CAPM assumptions, the market capitalization weighted portfolio is mean-variance efficient. In real world applications it has been shown by various authors that low risk portfolios outperform the market capitalization weighted portfolio. We revisit this anomaly using high-frequency data...
Persistent link: https://www.econbiz.de/10013030547
We present three modules that can be used in finance and investment courses to introduce undergraduate students to cryptocurrency risks and returns. Detailed instructions include learning objectives, assignment instructions, and links to free online resources. In Module 1, students are provided...
Persistent link: https://www.econbiz.de/10013492465
All too often, the concept of risk-neutral probabilities in mathematical finance is poorly explained, and misleading statements are made. The aim of this paper is to provide an intuitive understanding of risk-neutral probabilities, and to explain in an easily accessible manner how they can be...
Persistent link: https://www.econbiz.de/10013152871
The complexity of the global financial crisis beginning 2007 has challenged professionals. For students, the crisis's interconnected elements, covered in multiple courses and the concepts of derivatives central to it, are overwhelming. Providing short answers to their questions often creates...
Persistent link: https://www.econbiz.de/10013153067
In this paper we present an application where advanced undergraduate students can solve the expected utility portfolio model with a risk-free and a risky asset with both up and down returns in the Stock Market. With real Stock Market data, we use Excel Solver to find the portfolio decision and...
Persistent link: https://www.econbiz.de/10012860660
In this paper we present a tutorial exercise where students can solve a particular problem of insurance demand using the Excel Solver, and explore the main features of this type of problem. The document pretends to be self-contained since it includes an introductory theoretical background on...
Persistent link: https://www.econbiz.de/10012944979
This paper reports on the results of an AAA-wide survey on the state of faculty perceptions about, and actions toward, integrating IFRS into U.S. accounting curricula in a period of perceived reduction in regulatory momentum. In 2014, responses were received from 349 members representing all AAA...
Persistent link: https://www.econbiz.de/10012945011
We present a tractable model of the effects of nonfinancial risk on intertemporal choice. Our purpose is to provide a simple framework that can be adopted in fields like representative-agent macroeconomics, corporate finance, or political economy, where most modelers have chosen not to...
Persistent link: https://www.econbiz.de/10010303721
The precautionary principle (PP) applied to environmental policy stipulates that, in the presence of physical uncertainty, society must take robust preventive action to guard against worst-case outcomes. It follows that the higher the degree of uncertainty, the more aggressive this preventive...
Persistent link: https://www.econbiz.de/10010279642
We present a tractable model of the effects of nonfinancial risk on intertemporal choice. Our purpose is to provide a simple framework that can be adopted in fields like representative-agent macroeconomics, corporate finance, or political economy, where most modelers have chosen not to...
Persistent link: https://www.econbiz.de/10010958579