Author:
Publisher:
ISBN: 9788772101385
Category :
Languages : da
Pages : 0

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Author: Akhtarur Rahman Siddique
Publisher:
ISBN:
Category : Capital assets pricing model
Languages : en
Pages : 228

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Author: Neale Ashok Mahoney
Publisher: Stanford University
ISBN:
Category :
Languages : en
Pages : 215

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This dissertation has four chapters. The first three chapters examine health insurance markets in the U.S., focusing in particular on contexts where there are important interactions between health insurance plans. The fourth chapter is on the U.S. budget, examining the implications of annual budget cycles on the quantity and quality of end-of-year spending. Chapter 1, entitled "Bankruptcy as Implicit Health Insurance" examines the interaction between health insurance and the implicit insurance that people have because they can file (or threaten to file) for bankruptcy. With a simple model that captures key institutional features, I demonstrate that the financial risk from medical shocks is capped by the assets that could be seized in bankruptcy. For households with modest seizable assets, this implicit "bankruptcy insurance" can crowd out conventional health insurance. I test these predictions using variation in the state laws that specify the type and level of assets that can be seized in bankruptcy. Because of the differing laws, people who have the same assets and receive the same medical care face different losses in bankruptcy. Exploiting the variation in seizable assets that is orthogonal to wealth and other household characteristics, I show that households with fewer seizable assets are more likely to be uninsured. This finding is consistent with another: uninsured households with fewer seizable assets end up making lower out-of-pocket medical payments. The estimates suggest that if the laws of the least debtor-friendly state of Delaware were applied nationally, 16.3 percent of the uninsured would buy health insurance. Achieving the same increase in coverage would require a premium subsidy of approximately 44.0 percent. To shed light on puzzles in the literature and examine policy counterfactuals, I calibrate a utility-based, micro-simulation model of insurance choice. Among other things, simulations show that "bankruptcy insurance" explains the low take-up of high-deductible health insurance. Chapter 2, entitled "Pricing and Welfare in Health Plan Choice", is coauthored with M. Kate Bundorf and Jonathan Levin. The starting point for the paper is the simple observation that when insurance premiums do not reflect individual differences in expected costs, consumers may choose plans inefficiently. We study this problem in health insurance markets, a setting in which prices often do not incorporate observable differences in expected costs. We develop a simple model and estimate it using data on small employers. In this setting, the welfare loss compared to the feasible risk-rated benchmark is around 2-11% of coverage costs. Three-quarters of this is due to restrictions on risk-rating employee contributions; the rest is due to inefficient contribution choices. Despite the inefficiency, the benefits from plan choice relative to each of the single-plan options are substantial. Chapter 3, entitled "The Private Coverage and Public Costs: Identifying the Effect of Private Supplemental Insurance on Medicare Spending, " is coauthored with Marika Cabral. While most elderly Americans have health insurance coverage through Medicare, traditional Medicare policies leave individuals exposed to significant financial risk. Private supplemental insurance to "fill the gaps" of Medicare, known as Medigap, is very popular. In this Chapter, we estimate the impact of this supplemental insurance on total medical spending using an instrumental variables strategy that leverages discontinuities in Medigap premiums at state boundaries. Our estimates suggest that Medigap increases medical spending by 57 percent--or about 40 percent more than previous estimates. Back-of-the-envelope calculations indicate that a 20 percent tax on premiums would generate combined revenue and savings of 6.2 percent of baseline costs; a Pigovian tax that fully accounts for the fiscal externality would yield savings of 18.1 percent. Chapter 4, entitled "Do Expiring Budgets Lead to Wasteful Year-End Spending? Evidence from Federal Procurement, " is coauthored with Jeffrey Liebman. Many organizations fund their spending out of a fixed budget that expires at year's end. Faced with uncertainty over future spending demands, these organizations have an incentive to build a buffer stock of funds over the front end of the budget cycle. When demand does not materialize, they then rush to spend these funds on lower quality projects at the end of the year. We test these predictions using data on procurement spending by the U.S. federal government. Using data on all federal contracts from 2004 through 2009, we document that spending spikes in all major federal agencies during the 52nd week of the year as the agencies rush to exhaust expiring budget authority. Spending in the last week of the year is 4.9 times higher than the rest-of-the-year weekly average. We examine the relative quality of year-end spending using a newly available dataset that tracks the quality of $130 billion in information technology (I.T.) projects made by federal agencies. Consistent with the model, average project quality falls at the end of the year. Quality scores in the last week of the year are 2.2 to 5.6 times more likely to be below the central value. To explore the impact of allowing agencies to roll unused spending over into subsequent fiscal years, we study the I.T. contracts of an agency with special authority to roll over unused funding. We show that there is only a small end-of-year I.T. spending spike in this agency and that the one major I.T. contract this agency issued in the 52nd week of the year has a quality rating that is well above average.

Author: Byong-Ju Lee
Publisher: Stanford University
ISBN:
Category :
Languages : en
Pages : 132

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This thesis consists of three essays on international finance. The first essay is "Exchange rates and Fundamentals". A new open interest rate parity condition that takes account of economic fundamentals is developed from stochastic discount factors (SDFs) of two countries. Through this parity condition, business cycles or fundamentals are linked to exchange rates. Key empirical findings from this parity condition are as follows. First, this model beats the random walk hypothesis: economic fundamentals explain exchange rate movements for high interest rate currencies. Exchange rates of low interest rate currencies act like a random walk because they are less correlated with fundamentals owing to their low risk. For example, U.S. business cycles explain the direction of changes in exchange rates against the dollar. The same thing is true for Japan. Second, this model resolves the forward premium puzzle: the forward premium puzzle is not a general characteristic as regarded in previous studies. It happens when the risk awareness of investors is low, during economic expansions and for low risk currencies. The second essay is "Carry Trade and Global Financial Instability". Carry trade, an opportunistic investment strategy that takes advantage of interest rate differential across countries, is identified the cause of the large-scale depreciations of peripheral currencies in the later half of 2008. A simultaneous equations model, which is derived from a conceptual partial equilibrium model for a local foreign exchange market, is estimated from a cross-sectional sample. The results suggest that the larger appreciation of the yen than the dollar was brought about by a lack of the local supply of the yen rather than a more severe crunch of yen credits. The third essay is "The Economic Origin of Letters of Credit". This essay discusses the economic origin of letters of credit, an instrument widely used in international trade. A game theoretical analysis shows that letters of credit improve efficiency in trade settlements, increasing returns in trade. A few notable facts on letters of credit are discussed. First, the new institution is adopted by merchant banks to maximize their profits and in the process, an improvement in efficiency of international transactions is obtained. Second, the organization established by the legacy institution, bills of exchange, played a critical role in adopting the new institution. Third, the legal enforcement is not essential in this economic institution. Finally, two drivers are identified that improve efficiency of transactions: concentration and projection.

Author: Don M. Chance
Publisher: John Wiley & Sons
ISBN: 1118160649
Category : Business & Economics
Languages : en
Pages : 403

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In the updated second edition of Don Chance’s well-received Essays in Derivatives, the author once again keeps derivatives simple enough for the beginner, but offers enough in-depth information to satisfy even the most experienced investor. This book provides up-to-date and detailed coverage of various financial products related to derivatives and contains completely new chapters covering subjects that include why derivatives are used, forward and futures pricing, operational risk, and best practices.

Author: Carolina Orozco Garcia
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

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Recent demographic changes and financial crises have substantially challenged pension schemes worldwide. This dissertation aims to provide insight into the stream of participating life insurances and insurance portfolios. The analysis concentrates on premium sensitivities and adequate adjustments in risk-management strategies - essentially investment allocations and capital requirements - when changing the underlying assumptions. The first three articles analyse insurance products with long-term investment. The first article, "How Sensitive is the Pricing of Lookback and Interest Rate Guarantees when Changing the Modelling Assumptions?", investigates the option-price sensitivity of two common embedded guarantees in unit-linked products - namely, a minimum interest rate and lookback guarantees - when the initial pricing assumptions are uncertain. The analysis showed that lookback guarantees result in a higher risk in respect to changes in volatility parameters, while minimum interest rate are shown to be more sensitive to changes in the interest-rate parameters. The second article, "Is Fair Pricing Possible? An Analysis of Participating Life Insurance Portfolios", focuses on the fair pricing of a portfolio of policies when the default risk is considered. The risk-sharing that arises from the pooling of insurance policies may generate inequalities in the fairness of the premium paid by policyholders of different generations that belong to the same portfolio. The results show that conservative investment strategies, together with important equity contributions, are required to ensure the fair pricing of all generations that take part in the insurance portfolio. Under more risky investment strategies, wealth transfer among generations is unavoidable. The third paper, "Fair Pricing of Voluntary Participating Life Insurance Portfolios under Stochastic Interest Rates", is an extension of the second paper of this dissertation (cf. O.

Author: Siegfried Hecker
Publisher: Springer Science & Business Media
ISBN: 1461207770
Category : Science
Languages : en
Pages : 284

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This collection represents a unique undertaking in scientific publishing to honor Nick Metropolis, the last survivor of the World War II Manhattan Project in Los Alamos. In this volume, some of the leading scientists and humanists of our time have contributed essays related to their respective disciplines, exploring various aspects of future developments in science and society, philosophy, national security, nuclear power, pure and applied mathematics, physics and biology, particle physics, computing, and information science.

Author: Ralph Ellison
Publisher: Modern Library
ISBN: 0593730062
Category : Social Science
Languages : en
Pages : 817

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From the renowned author of Invisible Man, a classic, “elegant” (The New York Times) collection of essays that captures the breadth and complexity of his insights into racial identity, jazz and folklore, and citizenship across six decades. Compiled, edited, and newly revised by Ralph Ellison’s literary executor, John F. Callahan, this definitive volume includes posthumously discovered reviews, criticism, and interviews, as well as the essay collections Shadow and Act (1964), hailed by Robert Penn Warren as “a body of cogent and subtle commentary on the questions that focus on race,” and Going to the Territory (1986), an exploration of literature and folklore, jazz and culture, and the nature and quality of lives that Black Americans lead. With newly discovered essays and speeches, The Collected Essays reveals a more vulnerable, intimate side of Ellison than what we've previously seen. “Raph Ellison,” wrote Stanley Crouch, “reached across race, religion, class and sex to make us all Americans.”

Author: Gulian Crommelin Verplanck
Publisher:
ISBN:
Category : Contracts
Languages : en
Pages : 250

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Author: Xiaoyan May Bao
Publisher:
ISBN: 9781303312342
Category : Fair value
Languages : en
Pages : 94

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Prior research has focused on the impact of fair value accounting on equity markets. The impact of fair value accounting on debt maturity structure and credit risk has not been addressed in the literature. In essay one I investigate how the increased influence of the balance sheet approach on accounting standards is associated with the maturity structure for the most affected companies as indicated by the volatility ratio found in Demerjian (2011). I find that the balance sheet approach is associated with a higher portion of short-term maturity debt in a debt maturity sample, suggesting that short-term maturity debt is used to control the agency cost of debt arising from the balance sheet focus for the sample period from 1988 to 2012. These findings imply that the balance sheet approach, as one of the most significant trends in accounting standards, plays an important role in determining the maturity structure of debt, which is one of key elements of corporate financial policy. In essay two I examine the impact of fair value accounting on credit risk with the focus on Level 3 assets to investigate whether the disclosure of Level 3 assets provides useful information to debt markets. The characteristics that distinguish Level 3 assets from Level 1 assets and Level 2 assets are Level 3 assets' lack of an active market, either directly or indirectly, and the Level 3 assets more subject to management's manipulations. I find that higher amounts of Level 3 assets are associated with lower credit ratings. In addition, I find that larger amounts of Level 3 assets are associated with larger bond spreads for firms near a credit upgrade or downgrade. These findings have important implications because they indicate that fair value measurements may be useful to market participants in debt markets. Before the implementations of fair value measurements, the measurements of assets without active markets (Level 3 assets) have not been observable and so have been treated similarly to other components of assets that reduce the cost of debt at an aggregate level. This contributes to the debt valuation literature by providing evidence that market participants in debt markets distinguish assets without active markets (Level 3 assets) from the other components of assets once the measurements for Level 3 assets become observable.