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February 26, 2009
Q & A
Posted by bparke at 07:32 PM | Comments (0)
February 24, 2009
Q & A
Posted by bparke at 07:32 PM | Comments (0)
February 19, 2009
Discussion of Old Exam Questions
Posted by bparke at 10:21 PM | Comments (0)
February 17, 2009
Utility-Based Valuation of Risk - I
Three alternatives:
Two alternatives:
Posted by bparke at 10:16 PM | Comments (0)
February 12, 2009
Saving for Retirement
Posted by bparke at 08:51 PM | Comments (0)
Income and Substitution Effects
Posted by bparke at 07:10 PM | Comments (0)
February 10, 2009
Revisiting Investing in Education
Posted by bparke at 08:45 PM | Comments (0)
Intertemporal Substitution
The next lecture will show that this is caused by the income effect reversing the substitution effect:
Posted by bparke at 07:10 PM | Comments (0)
February 05, 2009
An Example: Investing in Education
Posted by bparke at 08:15 PM | Comments (0)
Investment Decisions
Invest if:
1. The present value of the costs is greater than the present value of the benefits, or
2. The rate of return is greater than the interest rate on money borrowed to finance the project.
The first criterion is easier to calculate and will be used in class. The second is common in the outside world because it abstracts from detailed numbers and applies across projects.
Posted by bparke at 08:12 PM | Comments (0)
February 03, 2009
Stocks
Our first theory sounds good, but is a little too general:
Our second attempt at a theory does not explain the data on prices and dividends very well:
Accounting for expected growth in dividends produces a much more realistic model.
A lemma:
An alternative model:
Posted by bparke at 10:38 PM | Comments (0)