The net present value (NPV) of an investment project having many potential outcomes can be expressed as a weighted average of the NPVs calculated from the individual outcomes, the weights being the outcome probabilities. Danielson (2016) demonstrates that this formula does not apply to the...

We provide a new pathway to the derivation of a half-dozen statistical results under standard assumptions, including key results due to Student and Fisher. To the best of our knowledge, these are the first new derivations of these results in 75 years. Our work links two seemingly disparate...

Literacy is a multi-dimensional concept. In this chapter, seven potential dimensions of literacy are considered: (1) Mathematical literacy, (2) Foreign language literacy, (3) Digital literacy, (4) Financial literacy, (5) Political literacy, (6) Environmental literacy, and (7) Health literacy....

The time value of money (TVM) equation is a key equation in finance. It takes the form of an nth order polynomial having n roots. In finance it is normal to calculate and use only one root (interest rate). The remaining (n-1) roots are mostly complex or negative and they are usually discarded....

This article takes a fresh look at reswitching. When two production techniques are compared, reswitching occurs when one technique is more viable than the other at a high interest rate, switches to being less viable at a lower rate, and reswitches to being more viable again at even lower rates....

Experimental evidence demonstrates a human tendency to extrapolate linearly from exponential data. A large literature labels this tendency ‘exponential growth bias.’ This article demonstrates that financial concepts are expressible as linear functions containing exponential terms, and...

Experimentalists researching individual time-preference behavior report that hyperbolic discounting explains their results better than exponential discounting. Financial institutions almost exclusively employ exponential discounting, so these results expose a rift in thought between financial...