Questions tagged [investment]

Regarding the purchasing of capital and productive materials by firms. this differs from saving which is a similar action done by consumers.

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

Why do sweep accounts not inflate prices at the end of the business day?

From investopedia, sweep accounts are defined as a bank or brokerage account that automatically transfers amounts that exceed a certain level into a higher interest-earning investment option at the ...
user47609's user avatar
1 vote
1 answer
58 views

Why do multiple investment funds exist?

Say that you are a head of an investment fund. Your goal is to maximise the return on money entrusted to you by investing in various enterprises. You look to your left, and see another investment fund....
Iron filings's user avatar
1 vote
2 answers
33 views

Can investments fund welfare?

People are encouraged to invest in order to provide passive income for their retirement. Meanwhile, lots of the population is on welfare, which, I understand, comes out of taxes. Investing isn't ...
Scott McNay's user avatar
0 votes
0 answers
10 views

partial equilibrium firm investment model with collateral constraints

I am trying to solve the partial equilibrium firm investment model with collateral constraint. My state variables are firm productivity, capital and debt. While I know how to iterate the value ...
Ганна's user avatar
0 votes
1 answer
116 views

Why do accumulating ETFs grow linearly instead of exponentially?

I am learning about investments and I often read that accumulating ETFs re-invest the dividends by buying more stocks of the underling assets. The advantage of this is that by doing so they take ...
Federico Gentile's user avatar
0 votes
0 answers
17 views

How Marxian economists evaluate current and future technologies for making investment decisions?

Current Marxian economists are incredibly vague about the merits of technologies and about concrete investment decisions, at least, the Western Marxian economists are. E.g. there is book https://www....
TomR's user avatar
  • 425
0 votes
1 answer
71 views

Future value of a "future" investment

Consider the following well-known simple exercise : You have a loan outstanding. It requires making three annual payments at the end of the next three years of $1,000 each. Your bank has offered to ...
Kilkik's user avatar
  • 119
0 votes
1 answer
103 views

Was must we invest in the highest NPV project?

I have this simple problem about Net Present Value (NPV) and I was wondering why should we maximise it. Suppose you have a firm and you can either sell it now for $ \\\$ $ 200.000 or invest $ \\\$ $30....
Kilkik's user avatar
  • 119
2 votes
1 answer
618 views

Saving equals investment according to Keynes

In "The General Theory of Employment, Interest and Money", Chapter 6 The Definition of Income Saving and Investment, John Maynard Keynes says: Income = value of output = consumption + ...
santos82h's user avatar
  • 175
2 votes
1 answer
73 views

Would Bretton-Woods capital controls have prevented the export-based industrialization of China and the deindustrialization of the West?

I sometimes hear this in a certain kind of political discourse, namely that in the "good old days" of Bretton-Woods capital controls were a thing (I don't dispute this) and that consequently ...
the gods from engineering's user avatar
1 vote
0 answers
75 views

How will market self-correct so that passive investing never becomes 100 %?

The premise of the paper titled The Arithmetic of Active Management by Sharpe is that active managers as a group have to necessarily underperform passive managers as a group because passive investors ...
David Sanetrník's user avatar
0 votes
1 answer
23 views

How to calculate generated interests while having two different nominal rates compunded into a single quarter

I would like to calculate the interest generated from an investment within a time period of 8 months. The bank manages an interest rate of 3.5% p.a. for six months, and the last two months is 1%. The ...
Amateur_Investor's user avatar
0 votes
0 answers
10 views

Which economic model and variables should I use to investigate the impact of sentimental shocks in central bank statements on investment?

0 I am currently working on a research project that aims to investigate the impact of sentimental shocks in central bank statements on investment in the economy. I am looking for guidance on selecting ...
Aabid Karim's user avatar
1 vote
3 answers
212 views

Implications for the economics literature of possible mistakes in Black-Scholes-Merton option pricing?

If this preprint (which is discussed here on QSE) is correct in showing that there are mathematical mistakes in the Black-Scholes-Merton option pricing framework, are there strands of the economic ...
MMFdW's user avatar
  • 11
1 vote
0 answers
35 views

Does discount rate and cost of capital mean the same thing to compute levelised cost of energy (LCOE)?

I came to understand that cost of capital and discount rate are two different parameters, although they are also used ...
hbstha123's user avatar
  • 111
0 votes
0 answers
278 views

Accounting for inflation when calculating the discount rate

Good afternoon! I am evaluating an investment project and I want to calculate the discount rate based on a risk-adjusted method. Calculation formula: discount rate = risk-free rate + risk adjustment + ...
Veva Viva's user avatar
0 votes
0 answers
13 views

What should policymakers do to increase national savings rate of a developing economy to decrease risk of volatility in ER due to withdrawl of FPIs?

Case in point is a developing country who find it's domestic savings insufficient and in turn depends on Foreign portfolio investment to increase it's productivity, wages and drive it's economic ...
MR LUN's user avatar
  • 31
1 vote
1 answer
95 views

Do an increase in foreign investment increase the value of domestic currency?

I'm now studying about international trade and policy. I've known that higher interest rate would attract foreign investment therefore the demand for domestic's currency gone up and increase the value ...
Ecoman's user avatar
  • 13
1 vote
1 answer
130 views

Does doing nothing produce negative net present value? How can we show that?

When evaluating investment projects, a popular approach is to calculate the net present value (NPV). A positive NPV suggests carrying out the project is better than not doing that, in light of the ...
Richard Hardy's user avatar
1 vote
1 answer
76 views

Understanding Minsky’s framework for rate transmission

Relevant except from Hyman Minsky: Although present value reversals occur-they certainly did in the 193Os and again to a much more limited extent in 1974-75 and 1981-82-the cyclical contractions and ...
Arash Howaida's user avatar
-4 votes
2 answers
61 views

Is there any problem with this scheme?

Edit: I searched about Pyramid scheme but a site said that it is a marketing scheme recruiting more people to make profit. Apparantly this site was wrong. But, that's the reason that I asked this. So, ...
Sophile's user avatar
  • 95
-1 votes
1 answer
133 views

"Rate of exploitation" and savings growth

The normative implication in Marxian economics is that "exploitation of labour-power" is a bad thing. I'm hoping to understand quantitatively who are the winners and losers. Definitions: A &...
llllvvuu's user avatar
  • 159
0 votes
0 answers
56 views

How many hedge funds are there?

For personal interest. This 2022 special report on hedgeweek.com says, Cayman is domicile to over 23,000 CIVs, including about 80% of all international hedge funds which suggests a maximum global ...
mjc's user avatar
  • 101
1 vote
1 answer
68 views

Investing and equity

I'm having trouble understanding how a typical investment works, and so far most textbooks are pretty vague with their language. Let's say you invest 200 dollars in a startup (let's start small). The ...
mariaa_soraya's user avatar
0 votes
1 answer
104 views

Do stock indexes (S&P 500, DJ, ...) directly depend on inflation?

I can't understand what stock indexes really are. What they are representing? As far as I know, they represent relative change (in points) in the prices of shares of a given set of companies. Is that ...
sshd's user avatar
  • 19
1 vote
0 answers
20 views

The case where the entire amount of investment goods are supplied by the imports

A positive investment multiplier does not exist in an open economy simple Keynesian model when the entire amount of investment goods is supplied from import. Examine the validity of this statement. My ...
petearGriffin's user avatar
0 votes
0 answers
47 views

How are retail investors served on the primary market?

When a company issues new shares on the primary market, is it possible or even obligatory to reserve a given amount for retail investors? If it is possible: How often is this done? (From Wikipedia I ...
Hans-Peter Stricker's user avatar
1 vote
0 answers
88 views

Differences between stocks and bonds

I just learned what bonds are. They seem similar to stocks, but different in key ways. I'd like to know all the ways. I'll list the differences that I currently believe they have. The only reason I'm ...
user110391's user avatar
1 vote
1 answer
32 views

Investment variable in GDP - Data Selection - World Bank, IMF

I want to test the correlation of a variable with investment in the national income formula C+I+G+NX. Using IMF data, there are a lot of different investment variables in different formats. What would ...
kleinerde's user avatar
  • 309
2 votes
1 answer
43 views

Is there a consensus that carbon prices are poor at driving investment?

A post dated 2017 by Skillings on the website of E3G, a think tank focusing on the political economy of climate change, refers (in the 5th paragraph) to: "recent emerging consensus that, whilst ...
Adam Bailey's user avatar
  • 8,369
1 vote
1 answer
60 views

Why does interest rate differential affect capital flow in equities?

With the recent news of US fed hikes, there are emerging markets where central banks have decided not to raise rates, like in India, Indonesia, China, etc. The common theme I read everywhere is this - ...
qwerty_uiop's user avatar
0 votes
2 answers
77 views

Is there a scenario where investment and interest rates could both be increasing

Is there a scenario where investment and interest rates could both be increasing? I know that lower interest rates lead to increase borrowing and thus increased investment spending. So there is ...
Jeremy's user avatar
  • 1
1 vote
0 answers
26 views

Information Asymmetry in capital markets: EU ad-hoc announcements/8-K filings in other countries

In many countries, companies whose securities are traded on a stock exchange are subject to an ad-hoc disclosure requirement. This ad-hoc announcement publication duty refers to the obligation to ...
MiFischer22's user avatar
0 votes
1 answer
22 views

Are major banks in US necessarily going to benefit from the rise of federal fund rates?

https://wtvbam.com/2022/01/05/fed-funds-futures-see-rate-hike-in-march-after-minutes-of-policy-meeting/ It is believed that Fed is very likely to raise the Federal Fund rates in the next a couple of ...
No One's user avatar
  • 111
2 votes
1 answer
74 views

Which model of capital accumulation do macroeconomists prefer, renting model or investing model?

Consider a closed economy with perfect competition, no government and no fiat money. Consumer goods are aggregated as a single type of goods and prices are measured in units of goods. For such an ...
user141240's user avatar
0 votes
0 answers
52 views

Why do we have *daily* series of T-bill yields?

I understand that each week the US Treasury issues new T-bills at different maturities (1-month, 3-months, 1-year, etc). As far as I understand, this issuance happens every Tuesday. After the auction, ...
Raul Guarini Riva's user avatar
0 votes
1 answer
87 views

Why we say "active investing puzzle" while we already know the reason?

Han,2021 describe active investing puzzle as: Notably, individual investors trade actively and have invested in active investment funds for decades, and they thereby have on average underperformed ...
Phil Nguyen's user avatar
  • 1,130
0 votes
1 answer
118 views

How does foreign aid money help another country develop?

How does fiat currency help a country's economic growth? For example, if a certain country such as the U.S or Brazil gives 1billion dollars to a developing country like Angola or Congo, how does that ...
Meraki's user avatar
  • 9
1 vote
1 answer
38 views

How to compare investments with different risk and expected return?

Supposing I can choose to invest money in several different investments, each having risk $\sigma_i$, for example, calculated as standard deviation and expected return $r_i$ let's assume they have ...
Paolo's user avatar
  • 113
0 votes
1 answer
156 views

Risk seeking investors: Do they benefit from return at all?

Starring on the indifference curves for different types of risk preferences I ask myself why the risk seeking investor would be indifferent between an investment on the far left of his indifference ...
xxgaryxx's user avatar
  • 105
0 votes
3 answers
179 views

Why does a risk-return relationship that has historically been positive confirm risk averse investors?

As I am reading through a corporate finance textbook I came across the following figure that plots the relationship between risk and return for different asset classes: The textbook states: Figure ...
xxgaryxx's user avatar
  • 105
0 votes
1 answer
65 views

Confusion regarding the definition of inflation premium

'Inflation premium' is defined here as the higher return that investors demand in exchange for investing in a long-term security, where inflation has a greater potential to reduce the real return. In ...
Sasikuttan's user avatar
1 vote
4 answers
69 views

Relationship between taxation, national debt, and pool of private investment money

We've all heard the argument that an increase in taxation of the wealthy, or of investment earnings in particular (capital gains + dividends) will discourage investment and hurt the overall economy. ...
scottef's user avatar
  • 119
0 votes
2 answers
68 views

What would happen if individuals stopped investing their money in conservative low-yield products? [closed]

There has been a rise in popularity of retail investing in stocks driven by higher annual % returns. The % returns offered by things like banking savings accounts or government bonds seem a lot less ...
aedcv's user avatar
  • 103
1 vote
1 answer
517 views

Does savings always equal investment? Are there any cases where savings could be removed from the economic system altogether and break the balance?

Assuming a closed economy, does savings always have to equal investment? If an individual produces a certain amount of a resource and saves it, that becomes part of the savings of the economy. However,...
Steve_Dragon's user avatar
1 vote
1 answer
38 views

Proximity-concentration hypothesis: homogeneous firms and symmetric countries

Hi everyone I am running into a stone wall and don't seem to be able to solve this, can someone show me the steps how I can insert 1 into 2 and get 3. $B=\frac{f_E+f_D}{φ^{(σ−1)}*(1+τ^{(1-σ)})}$ $π =...
James's user avatar
  • 13
1 vote
1 answer
69 views

What happens to an MBS if all the underlying mortgages are fully paid back by the borrowers much before the maturity date?

What would happen to an MBS (mortgage-backed security) if hypothetically speaking all the underlying mortgages were fully paid back by the mortgagees (borrowers), much before the maturity date? I ...
Akshay Prabhakant's user avatar
0 votes
2 answers
418 views

How did investment go from exogenous to endogenous in the IS/LM model?

Context: I am currently taking an introductory course to macroeconomics and we are on the topic of Keynesian Economic and the IS/LM model. Initially we saw that the investment (I) component of ...
confusion's user avatar
0 votes
2 answers
236 views

Why do stocks that don’t pay any dividends change price when the company does better?

I don’t understand why (non-dividend paying) stocks increase in price when a company is successful; is it just because everyone expects that everyone else will find it more valuable because the ...
maxbear123's user avatar
0 votes
1 answer
37 views

Negative Interest Rates and Pension Funds [closed]

How do negative interest rates impact the future prospect and business model of (defined benefit) pension funds? What could be winning investment strategies for pension funds in a negative interest ...
Analyst_11's user avatar

1
2 3 4 5