Fundamental valuation of extra-financial information

Fundamental Principles of Relative Valuation

CHAPTER 17 FUNDAMENTAL PRINCIPLES OF RELATIVE VALUATION In discounted cash flow valuation, the objective is to find the value of assets, given their cash flow, growth and risk characteristics. In relative valuation, the objective is to value assets, based upon how similar assets are currently priced in the market. While multiples are easy to use and intuitive, they are also easy to misuse. Cons...

Faster Valuation of Financial Derivatives

From Financial Economics to Fair Valuation

In this paper we address the issue of how to establish the fair value of an insurance-linked liability. This is done by considering the introduction into a simple, one-period market model of a new and quite general security (which, amongst other things, could be such a liability). We investigate the impact of this new security on the market and attempt to predict the price (the fair value) at w...

Post-Retirement Financial Strategies: Forecasts and Valuation

To keep the analysis simple, I do not take into account other sources of income, liabilities, real property, insurance, taxes and many other important aspects that should be considered in many cases when adopting a post-retirement financial strategy. In practice, the issues considered here should be only part of the required analysis. But they would be an important part and I hope that this pap...

From actuarial to financial valuation principles

A valuation principle is a mapping that assigns a number (value) to a random variable (payoff). This paper constructs a transformation on valuation principles by embedding them in a financial environment. Given an a priori valuation rule u, we define the associated a posteriori valuation rule h by an indifference argument: The u-value of optimally investing in the financial market alone should ...