Stranded investments

Switching Investments

2. Approach We first define a family of very simple basic investment strategies. We wish to guarantee that the performance of our strategy is close to that of any of the the basic strategies that we may consider, which can be achieved by hedging : distributing our starting capital over all basic strategies. Let δ = δ1, δ2, . . . be a sequence of positive reals, then the basic strategy σδ initia...

Self-Promoting Investments

What is the impact on human capital investment when a worker’s ability and investments are observed by the labour market only when the worker invests in self-promoting activities? When ...rms pay spot market wages, high ability workers overinvest in selfpromotion. There is no employment contract that attains full e¢ciency. Constrained e¢ciency is attained when employment bonds are feasible. The...

Justifying Investments in It

Traditional accounting techniques such as return on investment and net present value are often used when deciding investments in information technology. We examined both academic and trade literature to determine the utility of such techniques and to recognize alternatives. Findings reveal that this survey is needed and is important for information systems managers facing heightened scrutiny of...

Learning, investments and derivatives

The recent crisis and the following flight to simplicity put most derivative businesses around the world under considerable pressure. We argue that the traditional modeling techniques must be extended to include product design. We propose a quantitative framework for creating products which meet the challenge of being optimal from the investors point of view while remaining relatively simple an...

Investments Term Paper