The textbook analysis that accepts all projections with positive net present values as positive is quite generally wrong. The ability to delay a project means that almost every project competes with itself postponed. With uncertain interest rates, even the simplest of projects has an option...

In frictionless markets having no arbitrage, the asymptotic zero-coupon rate never falls. The same is true of the long forward rate. The long par-coupon rate can rise and fall due to forward rate movements at short maturities. This article relates the three types of interest rates and formalizes...

This article presents a simple, unified approach for valuing a variety of financial assets using digital contracts. Three types of digitals are used: a digital option paying either one dollar or nothing, a digital share paying nothing or converting into one share of the underlying asset; and a...