The recent notion of Average Internal Rate of Return (AIRR) [Magni 2010, The Engineering Economist, 55(2), 150-180] completely solves the long-standing problem of the internal rate of return (IRR). While the AIRR is a return measure, this paper presents a cash-flow measure, namely the ratio of...

This paper analyzes the net-present-value (NPV) model, a keystone in economics: Behaviors and lines of reasoning of NPV-minded decision makers are observed and analyzed. As a result, one finds out that the NPV methodology is biased and its decision makers fall prey to various forms of fallacies...

This paper proposes a method for evaluating a project under certainty by means of a systemic outlook, which borrows from accounting the way of representing economic facts while replacing accounting values with cash values. The investor's net worth is regarded as a system whose structure changes...

This paper generalizes Makeham’s formula, allowing for varying interest rates and for a non-flat structure of valuation rates. An average interest rate (AIR) is introduced, as well as an average valuation rate (AVR), which exist and are unique for any asset. They can be computed either as...

The Net Present Value maximizing model has a respectable ancestry and is considered by most scholars a theoretically sound decision model. In real-life applications, decision makers use the NPV rule, but apply a subjectively determined hurdle rate, as opposed to the allegedly correct opportunity...

The internal rate of return (IRR) is often used by managers and practitioners for investment decisions. Unfortunately, it has serious flaws: (i) multiple real-valued IRRs may arise, (ii) complex-valued IRRs may arise, (iii) the IRR is, in general, incompatible with the net present value (NPV) in...

ResumenEl ejercicio de valorar el riesgo crediticio en Colombia es una tarea ardua,toda vez que los elementos del contexto que deben ser considerados enel mencionado proceso son diversos. Esta situación conduce necesariamentea la combinación de métodos, tanto cuantitativos como cualitativos,...

El artículo, estudia las relaciones de dependencia entre los mercados financieros internacionales, indagando sobre el efecto del contagio financiero entre dos series de retornos de índices accionarios: el Dow Jones (DJ) y el índice general de la Bolsa de Valores de Colombia (IGBC). Lo...

El objetivo de esta investigación, es encontrar la composición óptima de un portafolio de inversión, de acuerdo con las condiciones propuestas en el nuevo sistema de pensión Multifondos durante junio 2003 a septiembre 2010. El cálculo de medición fue utilizando el modelo de portafolio...

Abstract: This research shows that it is possible for U.S. cattle feeders to obtain additional profits if a consistent technical strategy for trading is applied to the cattle crush spread. However, when trading costs are introduced, the likelihood of obtaining profit from trading the crush...