Valuing political risk
Article Abstract:
A model is designed to gauge the probable effects of political risk to foreign direct investment projects. The proposed approach, unlike other political risk assessment instruments, considers all the elements that generate losses and relates them to the risk's evolution process. It further utilizes the concept of Poisson jumps and geometric Brownian motion to represent explicit events and ongoing changes, respectively. Before the model can be used to obtain the cost of political risk involved, the current level of risk exposure must first be established.
Publication Name: Journal of International Money and Finance
Subject: Economics
ISSN: 0261-5606
Year: 1997
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The rate of return on savings and loan assets
Article Abstract:
A mathematical model was developed to assess the determinants of the rate of return on savings and loans assets. Data from savings and loan associations from 1965 to 1991 were ran through co-integration, Granger-Causality and OLS tests to determine the significant factors which have led to the collapse of the US savings and loan industry. Findings showed that mortgage rate, capital/asset ratio, price of crude oil, cost of deposits and the ceiling on federal deposit insurance determined the rate of return.
Publication Name: Studies in Economics and Finance
Subject: Economics
ISSN: 1086-7376
Year: 1997
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Income-constrained purchases of insurance and assets
Article Abstract:
A mathematical model was modified to test the hypothesis of the interdependency of demands for insurance policies and insurable assets. Results of the modeling showed a more realistic result that concurs with intuition and empirical observation. The model showed that full coverage of insurable assets are optimal despite premium loading by insurers. The study also showed insurance to be a normal good if the insurable assets are normal goods and the insurance is treated not as a Giffen good.
Publication Name: Studies in Economics and Finance
Subject: Economics
ISSN: 1086-7376
Year: 1997
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