Key Concepts in Finance: Efficient Markets, Agency Problems, and Capital Structure
If the utility of each possible profit expectation is multiplied by the number of ways in which it can occur, and if we then divide the sum of these products by the total number of possible cases, a mean utility (moral expectation) will be obtained, and the profit which corresponds to this utility will equal the value of the risk in question. (p. 24 of 1954 reprint (Samuelson, Probability, Utility, and the Independence Axiom 1952))
Semi-Strong Efficient Markets Tests
Semi-strong form efficiency is
Transportation, Trade, and Tourism: Key Definitions
Key Definitions: Transportation, Trade, and Tourism
Accessibility: The degree of ease of access to a particular place, related to the quality and quantity of transport means at its disposal.
Freeway: A large capacity road equipped with separate lanes for both directions and no grade crossings. Freeways typically involve two lanes in both directions and are designed with geometric features, such as sweeping curves, that allow for the movement of a large number of vehicles at high speed with a high
Read MoreEconomic Impact of War, Trade, and the Great Depression
The Economic Impact of War
The war-weakened European contenders, heavily indebted countries allied with the United States, faced significant challenges. The peace treaties (Versailles) generated large economic disagreements between countries and reduced investor confidence. Germany, burdened with war reparations, sought support from the United States but struggled with debt repayment, leading to serious economic problems in 1923-25. France and Belgium even invaded the Ruhr to guarantee payments.
Trade
Read MoreMacroeconomics and Inflation: Key Concepts
Item 11: Macroeconomics
1. Macroeconomic Vision
Macroeconomics studies the operations of the economy as a whole. It analyzes aggregate economic behavior and the forces that cause the global economy to expand or contract. The main macroeconomic issues are:
- Economic cycles
- General living standards
- Inflation
- Unemployment
- Public deficit
Macroeconomic variables are calculated from accounting definitions, reporting on specific aspects of a country considered globally. Economic policy is the set of measures designed
Read MoreEconomic Shifts After WWI: US Rise & Market Crash
Economic Consequences of World War I
The First World War significantly impacted the economic power of the United States and Europe. The conflict had very negative consequences, stemming from disagreements among the Allies about debt repayment and the organization of international economic relations, as well as the effects of peace treaties. The Treaty of Versailles imposed heavy reparations on the defeated nations, particularly Germany, which lost 13% of its territory and 10% of its population, leading
Read MoreEconomic Policy in Francoist Spain: 1939-1975
Evolution of the Economic Policy of the Franco Dictatorship
During the postwar years, from 1939 to 1959, Spain experienced autarky, a system where the nation’s needs were met solely through its own resources. Embracing self-sufficiency, Spain avoided external dependence. Franco made a virtue out of necessity. These were years of hunger, misery, and a daily struggle for survival. The state intervened heavily in the regulation of foreign trade, reducing imports, including consumer goods, raw materials,
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