This article maintains that the annual percentage rate (APR) is not an adequate measure of the cost of a consumer loan and therefore the central role of APR in consumer credit legislation should end. For decades, researchers, consumer groups and financial institutions have argued for simpler...

All conceivable solutions to the internal rate of return equation are shown to have meaning as well as use. Internal rates of return are the units in which value is measured and the quantities of such units. This result implies a single internal rate of return cannot be an investment criterion....

When two production techniques are compared, reswitching occurs when a technique begins by being cheapest at a low interest rate, switches to being more expensive at a higher rate, and then reswitches to being cheapest at yet higher rates. Some believe the inconsistency undermines the...

Macaulay duration approximates the yield elasticity of bond price. Since its introduction in 1938 researchers have sought a more accurate formula. This article demonstrates Macaulay's formula gives accurate results if applied appropriately. A bond with maturity n has n solutions for yield, one...

Conventional financial advice is that net present value (NPV) is a superior investment criterion to internal rate of return (IRR) because IRR has pitfalls. Despite the pitfalls, evidence shows most practitioners continue to employ IRR as an investment criterion. Such behavior is puzzling. This...

This article derives a new formula for the yield elasticity of bond price. The formula provides accurate results without resorting to complex mathematics, and gives new meaning to the concept of duration in fixed-income analysis