Monthly Archives April 2011

Techniques of Pricing Options 19th

In the period 1972-73 there was a fateful coincidence. Three developments happened in a short span of time, and together they spawned a revolution in corporate finance. The pressures on corporate financial managers until that time were intensifying, but the events of 1972-73 ratcheted up the intensity. The events began when Black and Scholes published [...] Read More…

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How to Diversify Your Business and Investment Portfolio 19th

The starting point for the Standard Model is risk aversion and the tradeoff between risk and return. Most market participants are risk averse, and savers have good reasons to be especially risk averse. In the aggregate, the people who supply savings to the markets are more risk averse than the would-be users of other people’s [...] Read More…

By Make Money | Posted in Investing and Investment | Tagged , , | Comments (0)

Legal and Social Infrastructure of Business and Finance 19th

Every business operates in a legal and social environment, and the Standard Model assumes that a sophisticated framework of institutions is in place and is functioning properly. In view of the recent financial scandals, it is relevant to state several essential characteristics that a country’s financial system has to have. There has to be rule [...] Read More…

By Make Money | Posted in Personal Finance | Tagged | Comments (0)