Questions tagged [finance]

Finance describes the management, creation and study of money, banking, credit, investments, assets and liabilities that make up financial systems, as well as the study of those financial instruments.

Filter by
Sorted by
Tagged with
0
votes
0answers
7 views

Accounts Payable and Receivable- Annual Balance Sheet and Budget [closed]

Based upon the balance sheet as of 12/31/2021 for company X, Accounts Receivable: 6,000,000 Accounts Payable: 3,000,000 Short Term Loans: 5,000,000 Information regarding 2022 budget: On 12/31/21, X ...
0
votes
1answer
24 views

Why do the PV and FV formulas (in Excel, at least) use slightly different geometric series?

With geometric series, I understand that, broadly, you can sum from $1$ to $n$, or from $0$ to $n-1$. Let $r=0.03, p=\\\$10, n = 10$. $\sum_{j=s}^{j=s+n-1}{pa^j}=\frac{p\left(a^{n}-1\right)a^s}{a-1}$ ...
0
votes
0answers
12 views

Harrington Emerson and his 12 principles of labor productivity

Are these principles currently relevant? Which principles would you add or, on the contrary, exclude? Which principles are observed today, and which are not? Why? Which of the principles would you ...
0
votes
0answers
12 views

Combined Buffer Requirements Basel III

Let's take this example: A bank is required to maintain minimal capital requirements according to Basel III as follows: CET1 - 4.5% Tier1 - 6% Tier1 + Tier2 - 8% In addition it has to apply these ...
0
votes
0answers
16 views

Corporate Finance introduction and mentoring for Non-Finance - topics to focus on?

I work for an international engineering company and have been in an engineering position for 10+ years. As part of the career development I have expressed interest to learn more about the finance side ...
0
votes
3answers
88 views

Why do banks need to borrow money (i.e. bond issuance)?

When a bank gives out a loan, a simultaneous liability and asset is created on their balance sheet, and 'external' funding doesn't fit into this picture... so why do they need to borrow money?
2
votes
1answer
33 views

$E[F_T] = F_0$ implies $p = \frac{1-d}{u-d}$? or is implied by?

From Ch 12 in Hull's OFOD, we compute the risk-neutral probabilities for a futures contract: Later in Ch 17, futures options are valued, and we have the same result: In relation to Chapter 16 and 17,...
1
vote
1answer
29 views

Arbitrage free implies complete market in general binomial model?

In Tomas Björk's Arbitrage Theory in Continuous Time, there exists this proposition It seems that to show that the model is complete, we must show that the claims are reachable, i.e. we must find ...
1
vote
0answers
32 views

Why do they always say: "this is not financial advice"? [closed]

Every single time there is a video about finance (especially Bitcoin), they always nag on about how: This is not financial advice. And then they give financial advice. Why do they have to say this? ...
0
votes
1answer
31 views

Cash flow of a loan (perspective of a bank)

if you receive a loan from a bank, how does the cash flow of the bank look like? I found the following: https://fincomplete.com/ratgeber/artikel/wie-berechnet-die-bank-meine-kreditzinsen-2 (...
1
vote
0answers
37 views

Will financial markets always heavily penalize the company if the CEO criticizes its products?

https://en.wikipedia.org/wiki/Stephen_Elop#%22Burning_Platform%22_memo https://communities-dominate.blogs.com/brands/2011/08/coining-term-elop-effect-when-you-combine-osborne-effect-and-ratner-effect....
1
vote
1answer
66 views

Was the financial crash of 2008 caused by top graduates of the American Ivy Leagues working at wall street banks?

From this article by Lisandro 'Leloy' Claudio, a Philippine/a Filipino professor of history, politics, South & Southeast Asian Studies (and not necessarily of finance, economics, mathematics or ...
0
votes
1answer
47 views

Have the deregulation measures that caused the 2007-2008 crisis been rolled back?

The 2007-2008 financial crisis was largely attributed to several deregulation measures, especially the Gramm-Leach-Bliley act. Have any of these measures been rolled back after the crisis, or new ones ...
-2
votes
1answer
36 views

Can we 'predict' the delta of a stock? The delta of a stock is $\pm 1$ right? [closed]

A stock is like a living organism. A sparrow, say. And we are able to create an emergent-based abstraction of that sparrow, which closely approximates the sparrow itself, accounting for migration ...
3
votes
1answer
70 views

Calculating Tobin's q from the financial statements of publicly listed companies

I'm interested in doing some empirical analysis of firm's investment behavior using financial statements (such as asset, working capital, operating cost, etc). One variable I want to manually ...
-1
votes
1answer
25 views

What type of dividends are there [closed]

Then came Meredith Whitney, with news. Whitney was an obscure analyst of financial firms for an obscure financial firm, Oppenheimer and Co., who, on October 31,2007, ceased to be obscure. On that day ...
1
vote
0answers
10 views

Can I test Granger causality in cyclical components?

I want to test Granger causality test in cyclical components of GDP and private credit, obtained with Christiano-Fitzgerald filter in annual growth rates of quarterly data. The main purpose is to find ...
0
votes
0answers
26 views

How to interpret the Alpha in a multi-factor model?

For the CAP-M, the alpha can be interpreted as the excess returns of a benchmark index. However, how should we interpret the alpha in a multi-factor model, like Carhart's 4-factor model? Does it still ...
0
votes
0answers
25 views

Is there any reference for labour finance?

Is there any recent reference for labour finance, in which labour finance relating to financial statements? And what are the alternative name for "labour finance"?
1
vote
1answer
33 views

How do I calculate the price and risk of a senior tranche?

Say I grant two risky X years loans P(default)=0.1 of 1000 USD. For simplicity let us assume that the interest rate is 0. I want to sell a X years Senior tranche of 1000 USD and a Junior tranche of ...
1
vote
1answer
85 views

Internal rate of return

Trying to finding the internal rate of return R: Net present value of costs is $\ Y(s)$ Net benefit is $\ Y(s+1)-Y(s)$ in every period t up to$\ \infty $ The answer is given as $\ R=\frac{Y(s+1)-Y(...
0
votes
0answers
48 views

Event Study - Definition of Estimation Window (Trading Days vs Non-Trading Days)

I am currently conducting a event study for my research project on M&A. I have all data available and want to use https://www.eventstudytools.com/. But there is one clear which is not apparent to ...
0
votes
0answers
14 views

Are these two different cases when it comes to Forex Reserves?

In a forex reserve, what is the difference between "Buying US Dollars to pile up reserves" and "Using FPIs, remittances or exports to build up reserves" ? How differently do they ...
0
votes
1answer
39 views

What makes a shareholder a "shareholder of record"?

In public companies filling some reports with the SEC (10K for example), there is a mention of the number of shareholders of record. Example: "As of April 20, 2021, we had approximately 40 ...
1
vote
0answers
16 views

Question on the choice of boundary in the CUSUM test when we make some resampling

Question on the choice of boundary in the CUSUM test when we make some resampling We are considering to make a CUSUM test for some economical time series $𝑋=(𝑥_1,..,x_n)$. Suppose 𝑋 contains many ...
0
votes
2answers
74 views

Can an appreciating currency lead to inflation?

If a currency, e.g. the rupee (INR), is appreciating against, say, the USD, it possibly means that there is a high demand for the former. India could have net exports, high remittances, increasing ...
0
votes
1answer
72 views

How to handle the missing values' issue of newly listed stocks?

I am trying to test some asset pricing models on 10 portfolios for the period of 2010-2020. The problem is that three of these portfolios included stocks that are newly listed in 2017 and 2018, so I ...
2
votes
0answers
13 views

Quote or price driven markets

Where can I find some details about quote driven markets? Can anybody show any notes or provide some paradigm about what the trader sees when he is about to trade in such a market? They say that he/...
2
votes
1answer
84 views

Net present value

I have a textbook which contains a question which is as follows. Conveniently, the textbook doesn't have an answer key: Calculate the net present value of the following cash flows: You invest \$2000 ...
1
vote
2answers
208 views

risk aversion and convexity of indifference curve

This is a question from the CFA exam. With respect to utility theory, the most risk-averse investor will have an indifference curve with : (a) greatest slope coefficient (b) most convexity The answer ...
1
vote
0answers
26 views

How to understand: interest income is a moving average of past interest rates

I encounter this question in the paper by DRECHSLER et al. (2021) (Banking on deposit). How to understand that "interest income is close to a moving average of past interest rates, consistent ...
0
votes
0answers
34 views

calculation of the real domestic return of a foreign stock

I would like to calculate the real domestic return of a foreign stock What I know Real price is $$P_{Real, t} = \frac{P_{Nominal, t}}{CPI_t}$$ where CPI is consumer price index. And I know that the ...
0
votes
2answers
77 views

Is the fundamental analysis also a self-fulfilling prophecy?

John J. Murphy in the first chapter of his book "TECHNICAL ANALYSIS OF FINANCIAL MARKETS" says that concerns regarding fundamental analysis being a self-fulfilling prophecy are seldomly ...
1
vote
1answer
70 views

Shouldn't corporate tax be calculated based on EBIT instead of EBT?

When I was studying Corporate Finance in university, I was surprised to learn that it is more advantageous for corporations to take more debt (even if they don't need to) because it creates tax shield ...
2
votes
1answer
45 views

Is there a financial hypertrophy ? Could you make a case for finance?

I've the impression that finance is in hypertrophy. But I'm not an expert on it, so I'd like those who are more knowledgeable than I am to do a [steelman][1] of it. The things that make me thinking ...
0
votes
2answers
83 views

How can anyone possibly predict how the price of anything (stocks, Bitcoin, fiat, etc.) will change without "insider knowledge"? [closed]

Other than the fact that all centralized (and thus "quick") exchanges require KYC/AML nonsense, making it impossible for me to have an account there, I've never dared to even try once to &...
2
votes
1answer
40 views

How to interpret risk premium

I do not understand the notion risk premium. Let us suppose that John goes to the city by car, but he is thinking about not paying for the parking. If he is caught in the act he must pay the fine. How ...
3
votes
2answers
147 views

Can banks 'create' money on their own or do they need help from other banks?

My current understanding of the banking money multiplication process goes as follows: Alice comes along and deposits 100 cash into Bank A. Bank A gains 100 in vault cash (reserves) as an asset and 100 ...
1
vote
1answer
54 views

Finance vs. financial economics (terminology)

What is the difference between finance and financial economics? E.g. we have tags for both* and I wonder when to use which, but not only. *And one more on financial markets – see this thread on Meta ...
0
votes
1answer
53 views

Is "normal distribution" a good choice for modeling future inflation rates?

I have a financial model that generates future values for a present sum of money based on its growth by investment minus inflation adjusted expenditure. Rather than use fixed rates for growth and ...
0
votes
0answers
23 views

What is the intuition for the potential loss of market makers on LS-LSMR?

What risk do liquidity providers take on when they provide liquidity to an LS-LSMR automated market maker pool? How much can they lose?
1
vote
0answers
25 views

overnight index swaps OIS

I'm writing a paper where I am using expected federal funds rates at different horizons and wanted to use the OIS as a proxy for what the market expects the FFR to be post FOMC-meetings. However, I ...
0
votes
1answer
31 views

Slope vs elasticity of demand function - Is it the same thing?

Do the slope of a linear demand function and the elastisicy of demand coincide when we use specific preferences for pricing. As a paradigm, if we consider the case of CARA normal preferences, by ...
0
votes
1answer
32 views

why federal fund rate vs treasury bond yield generally move in the same direction?

My own thought is, if the fed lowred federal fund rate, peoole should look for investment with greater return, like treasury bond. More demand=decline in yields but why do they generally move in the ...
1
vote
3answers
46 views

How do you differentiate between a business expense and an investment for the purpose of profit reporting?

As I understand it, in a company, profit will be invested, either into capital assets or into projects. How do you distinguish between an expense, and reinvesting profits back into company projects? ...
1
vote
2answers
66 views

Elasticity of demand functions

I have some question about the elasticity of the demand functions of two different traders/consumers. Suppose that $x_1$ and $x_2$ are the elasticities of the demand functions of these agents. ...
1
vote
1answer
104 views

Difference between yield curve and term structure of interest rate

Can somebody please explain me the difference between yield curve and term structure of interest rate? Thanks
2
votes
1answer
58 views

Bothersome Mean/Variance Analysis

I'm currently writing my thesis in which I compare a series of ESG General Equilibrium models. I fell over this proof in Pastor, Stambaugh, Taylor Sustainable Investing in Equilibrium (2019) page 42. ...
3
votes
1answer
130 views

HARA preferences details

I am searching for some exntensive details about HARA preferences. Where could I find some extensive details for HARA preferences? Something like a textbook or notes
2
votes
0answers
34 views

Nash in demand functions!

I am searching for some types of games that are played in linear demand functions. Altough I hear that there is a vast literatrure for games that are played in the intercept or the slope of the demand ...

1
2 3 4 5
7