In a previous article,1 we discussed some of the basic tax considerations investors face in lawsuits. We concluded that debt treatment tends to be unfavorable to an investor because income is ordinary and the investor may even be required to accrue phantom income. Outside the debt context, we observed, the investor tends to be indifferent as to whether the arrangement is a prepaid forward contr...

We consider the utility maximization problem for an investor who faces a solvency or risk constraint in addition to a budget constraint. The investor wishes to maximize her expected utility from terminal wealth subject to a bound on her expected solvency at maturity. We measure solvency using a solvency function applied to the terminal wealth. The motivation for our analysis is an optimal inves...

In the era of intelligent economy, to achieve business development, companies have shifted from focusing on physical resources intangible and increasingly rely investment in assets. This phenomenon is a consensus. Intellectual capital skill that difficult for competitors replicate most significant asset modern firms. Research intellectual mainly focuses impact companies’ performance; however, t...

This work introduces a new tool for a fund manager to verifiably communicate portfolio risk characteristics to an investor. We address the classic dilemma: How can an investor and fund manager build trust when the two party’s interests are not aligned? In addition to high returns, a savvy investor would like a fund’s composition to reflect his own risk preferences. Hedge funds, on the other han...

This study focuses on how entrepreneurs can optimize the venture capital procurement process by understanding the venture investment decision-making process. For new ventures, procuring capital is a notoriously difficult process. To succeed, an entrepreneurial team must overcome investor uncertainty about the quality of their product/service/idea and market, as well as their own capability to e...

We analyze the portfolio choice of an investor who can invest in two risky assets (in addition to a riskless asset) and who is subject to taxes on realized capital gains. These taxes appear in the portfolio choice problem as a form of time-dependent, endogenous transaction costs. Similar to the case of portfolio choice with transaction costs, the optimal strategy of the taxable investor contain...

An “average investor” is an investor who has “average risk aversion”, “average expectations” on the market returns and should invest in the “market portfolio” (this is, according to the Capital Asset Pricing Model, the best possible portfolio for such an investor). He is compared with a “non-average investor”. This—in our setting—is an investor who has the same “average risk aversion” but inves...