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Questions tagged [investment]

The tag has no usage guidance.

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Yield To Maturity exact meaning

From investopedia: "YTM is the total return anticipated on a bond if the bond is held until it matures" I have also seen this interpretation used in other sources however this seems wrong to me. ...
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0answers
7 views

What is the Canonical Metric for Investment? (U.S.)

I'm currently taking a run-of-the-mill Intermediate Macro class and have coursework which asks to produce a vis that tracks U.S. Investment from 1970-2014. What is the salient/canonical National ...
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1answer
11 views

Determine equation for the IS curve [on hold]

An economy has​ full-employment output of 1,000. Desired consumption and desired investment​ are: C ​= 250 ​+ 0.90​(Y-T​) - 500r I ​= 200 - 600r. Government purchases and taxes are given to​ be: G​...
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0answers
6 views

How do I calculate past stocks' adj. close price if there was a dividend?

Adjusted close price is the price that has been amended to any corporate actions or distributions. So I can see why it makes sense to adjust close prices in respect to dividend give outs and stock ...
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3answers
76 views

Fixed-income investment in a low interest-rate environment

From an investment perspective, it seems to me that a low interest-rate environment can yield to some relatively "un-risky" profits. As the interest-rate can barely go lower, we now it should rise ...
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15 views

The connection between risk and the quality of investment decision

Is there any psychological model that suggests that for optimum quality of investment decision, there has to be some risk involved?
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2answers
137 views

Can't a country grow its GDP without foreign investment?

Whenever various developing countries around the world talk about growing their economies, they talk about facilitating foreign investments and they put so much emphasis on it as if a country's ...
-1
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1answer
116 views

Investor's optimization problem with risk aversion

Consider an investor with initial wealth $w$ and has to decide how to invest it. There is a riskless asset with rate of return $r$. The risky asset has return $x_i$ with probability $\pi_i$ for $i=1,2,...
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1answer
13 views

Why wouldn't an arbitrageur who shorts an overpriced security, and longs a substitute company, break even?

A Random Walk Down Wall Street (2015 11 ed, but an 2019 ed. is upcoming). p. 249 Top.   Suppose irrational investors cause an oil company security to become overpriced relative to both its ...
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0answers
9 views

Why holdings in offshore centers eventually wind up in the same pattern as those that go directly to other countries?

In this paper by Lane and Milesi-Ferretti (2008), the authors wrote: Nevertheless, to the extent that every dollar invested by a source country in an offshore center is invested by the offshore ...
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0answers
12 views

Investment analysis - taxes on the initial cost

I am trying to understand better how investment analysis works in regard of taxation. Specifically, if I have an investment with an initial cost (let's say is a new robot for my factory) with x cost, ...
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0answers
18 views

Neoclassical Convergence Hypothesis in the Euro Area

The Neoclassical Convergence Hypthesis states that current account deficits should not be viewed as problematic, because they are a sign of functioning financial markets and higher income growth in ...
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0answers
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Effect of taxes/business confidence on real wage

The sample quiz that was given by a professor includes a section about real wages which wasn't mentioned in class or in the textbook. I also searched online, but didn't find anything. The question is ...
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1answer
20 views

When to invest into additional products?

This is a very applied question so I hope it's the correct adress here for it: I'm running a small entertaining business for virtual reality experiences. Investment was about 120 k. I now build it ...
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2answers
74 views

Why would the rich care about the poor's overinvestment in riskier investments?

Glasbeek, Harry. BA, LLB (Melbourne), JD (Chicago). Class Privilege: How Law Shelters Shareholders and Coddles Capitalism (2017). p. 196 Bottom.   Also, from an investor's point of view, limited ...
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1answer
48 views

Does savings lead to investment in physical capital?

In the introductory macroecon textbook I'm reading, it's made clear that savings=investment. Mathematically, this makes sense to me. However, I'm having trouble understanding the qualitative ...
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0answers
14 views

What is the easiest and cheapest way to store big money with option to any moment get then in cash? [closed]

Imagine I have a lot of money and my number 1 aim is to store them somewhere where I can get them fast if I need them. I don’t want to have dividends from my money but if I will it would be great. ...
2
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1answer
14 views

Summary data on venture capital

Is there a trade group, government, or other publication providing data on aggregate venture capital investment? Specifically, I'm interested in how overall venture capital funding has changed over ...
2
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3answers
99 views

Should housing be considered a form of capital for the purpose of capital gains taxation?

Economists across the political spectrum almost unanimously oppose the home mortgage interest tax deduction. While I'm sure there are a few whom I've missed, I could only find a single professional ...
4
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1answer
42 views

Are stock exchanges market makers?

Are stock exchanges like NASDAQ and NYSE market makers? In other words, are they providing liquidity by pairing individual buyers and sellers with each other in real-time? Or does it work differently?
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0answers
21 views

User Cost of Capital Calculation

I have an exam revision question that goes like this: Assume that current rates on safe investments equal to $5\%$, mortgage interest rates equal to $6\%$, houses last $100$ years on average and ...
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1answer
57 views

Interest Rate and Foreign / Domestic Investment

I read that increased interest rate attracts foreign investment but discourages domestic investment. Why does interest rate have different effects on foreign and domestic investments?
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0answers
17 views

Where to find bilateral data on FDI before 2001?

Where can I find bilateral data on FDI between countries over time (30 years)? On World Investment Report (WB) I could have this data for only years 2001-2012. And from CDIS (IMF) I found years 2008-...
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2answers
76 views

How does IS-LM model reduced investor confidence?

I am doing an essay on how a sovereign debt rating downgrade to junk status affects the economy. I wanted to use a theoretical framework to think about it, and seeing as an increase in the interest ...
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0answers
17 views

Concept of return on investment but for the state instead a firm

So, following a discussion I had today, I have the following question. If we use the return on investment (ROI) to describe the gain of an investment is there a similar concept not for a company but ...
4
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1answer
18 views

Why FDI stock in the same year is different in the same reports?

From World Investment Report 2003, in 2000, the US has 12.4% GDP as FDI inward stock and 13.2% GDP as FDI outward stock. These numbers are equivalent to 1274720 million USD, and 1356960 million USD. ...
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0answers
20 views

Assessing Economic Development Policy Impact

I am trying to understand how a given economic development program's impact differs by community in question. This distills into two distinct questions: 1) What is the impact (GDP, unemployment) of ...
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1answer
58 views

Why is investment not a cost in firms profit functions?

In all textbooks I've seen profits is written as: $$\pi=py-wL-rK$$ It is evident here that w and r are operational costs. But unless there is no depreciation and the level of capital is to remain ...
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0answers
40 views

Calculating equilibrium income of a three sector model

I need your help ....suppose the economy is like this... Transfer payment is 100 000, Investment 10 000 000 Government expenditure 50 000 000,MPt 0.3,MPC 0.9 Compute the equilibrium income
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0answers
40 views

Best strategy for investing and buying out property with many owners(20+)

First I am not economist, so sory if I am not using economicaly correct language. But this is a real life situation. I would like to know what are the buy out strategies for investor when he has to ...
2
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2answers
86 views

How does Bolivia maintain its high economic growth and the highest direct foreign investment in South America, despite its economic policies?

Nationalization of industries has always been anathema to foreign investment yet Bolivia now has the highest foreign direct investment despite Evo Morales' policies. Also not that it is always bad but ...
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1answer
33 views

Kelly criterion wealth allocation alternatives

Thanks for your patience with answering my question. I am interested in building an optimal wealth allocation strategy across multiple betting opportunities, correlated or uncorrelated and with ...
1
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1answer
32 views

In Mankiw's Macreoconomics, how come capital is assumed to be fixed while investment is assumed to be variable?

I'm looking at Greg Mankiw's Macroeconomics (7th edition), at the model presented in chapter 3: $Y = C + I + G,$ where $Y$ is total output, $C = C(Y-T)$ is consumption, $T$ are net taxes (fixed by ...
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0answers
24 views

Underlying of a derivative

I wonder, could a credit event be an underlying of a future? What about an option, a swap? I know, there are credit spread options, but I'm not sure, if a credit event is their underlying. Also I'...
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0answers
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If I am a newbie, what sources should I read first to learn to calculate return of investment and evaluate risk of investment?

I want to understand return of investment and make a risk analysis. Then decide to enter an auction. What sources should I read first?
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0answers
11 views

How can I change this formula to better calculate the reward of some financial movements? (avoiding to consider maturation)

I am here to ask you a suggestion about how to correctly handle this situation related to how to calculate the earned money into an financial investment. Here you can find a basic Excel sheet related ...
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2answers
1k views

What is the difference between a loan and an investment?

IMF, WB, ADB, IDB, AIIB are known to give loans. On the other hand, China is said to be investing in Pakistani project termed as CPEC. What is the difference between these two terms in these two ...
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0answers
43 views

Foreign revenue streams as proxy for foreign investment

I have access to a very detailed dataset on the revenue streams of a large number of firms and their country of origin (in percentage of total revenue). Using other data, the international country ...
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0answers
62 views

Monthly savings plans

Monthly savings plans in stocks or funds are typical investments for many people. On aggregate, these plans generate a large demand on the underlying assets, often around the end/beginning of a month. ...
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1answer
164 views

Difference between Negotiable Instrument and Financial Asset

So here are the two pages I was reading to try and understand : Negotiable Instrument and Financial Asset Confusion started as both pages use Certificates of Deposits(CDs) as an example.So a CD is ...
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1answer
32 views

Is there any investment model with time-varying depreciation rate?

Is there investment model with different depreciation rate. For example, d1(depreciation rate in 1 period), d2(depreciation rate in 2 period)
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1answer
79 views

Is Foreign investment positive or negative for a country? [closed]

When a state company is sold to foreigners in a country, people who live in that country generally do not like it. Because the company is sold to foreigners. People are acting with a sense of ...
1
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1answer
20 views

What aspects of macroeconomics should I address for convincing an investor to invest in a certain country? [closed]

I have a task at my internship which is to write 2 pages about the economic conditions in my country. My question is what I could include in my research. Surely, I'll address inflation, currency ...
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2answers
118 views

Why would males' shorter pension's savings produce more, and not less, income?

Source: The European Union: A Beginner's Guide (1 ed. 2012) by Alasdair Blair. [p 139:]  Gender has traditionally played a key role in the pricing of insurance policies.   In 2004 an EU Directive ...
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2answers
426 views

What is the danger of (China's) investment-led growth as opposed to consumption-led growth?

I keep reading that China must switch to consumption-led growth or productivity-led growth, that investment-led growth is 'dangerous.' I understand that it is probably not sustainable in the sense ...
3
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1answer
49 views

An explanation of the formula for the present value of an annuity

I'm reading a book that gives three formulas. In all of these formulas: $x$ is the amount of money to be received in the future $n$ is the number of years $r$ is the interest rate. The first is the ...
0
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1answer
43 views

Collar strategy for options trading [closed]

I am new to investing on the market so I am doing some research and studying. From what I can tell, the purpose of a collar strategy for options trading is to protect your gains you've made on the ...
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0answers
14 views

Is there any legislation regualting correlation amongst assets?

I know the Dodd-Frank Act exist in part because of the mortgage backed securities crisis and a large piece of that is to protect Americans from the "too big to fail" financial holdings companies. But ...
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0answers
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Foreign investment with US equity; typical expected rate of return?

I have been trying to answer this question but cannot find a suitable dataset or compilation. When a US investor invests in a non-US project what are typical rates of return he is looking for? I do ...
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1answer
2k views

What affects the interest elasticity of investment?

Firstly, my understanding of the interest elasticity of investment (IEI) is that it is the responsiveness of investment to changes in interest rates. As a result, I can think of one reason why the IEI ...