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Pure play method. In finance, the "pure play method" is an approach used to estimate the cost of equity capital of private companies, which involves examining the beta coefficient of other public and single focused companies. [2] See also Hamada's equation . Here, when estimating a private company A's equity beta coefficient, the equity beta ...
Foundry model. The foundry model is a microelectronics engineering and manufacturing business model consisting of a semiconductor fabrication plant, or foundry, and an integrated circuit design operation, each belonging to separate companies or subsidiaries. [1] [2] [3] [4]
The risk-free rate is also a required input in financial calculations, such as the Black–Scholes formula for pricing stock options and the Sharpe ratio. Note that some finance and economic theories assume that market participants can borrow at the risk-free rate; in practice, very few (if any) borrowers have access to finance at the risk free ...
The free money game is an example of a "special" game with an even number of equilibria. In it, two players have to both vote "yes" rather than "no" to get a reward and the votes are simultaneous. There are two pure-strategy Nash equilibria, (yes, yes) and (no, no), and no mixed strategy equilibria, because the strategy "yes" weakly dominates "no".
In the stock market the risk premium is the expected return of a company stock, a group of company stocks, or a portfolio of all stock market company stocks, minus the risk-free rate. [6] The return from equity is the sum of the dividend yield and capital gains and the risk free rate can be a treasury bond yield. [7]
10 year minus 2 year treasury yield. In finance, the yield curve is a graph which depicts how the yields on debt instruments – such as bonds – vary as a function of their years remaining to maturity. [1] [2] Typically, the graph's horizontal or x-axis is a time line of months or years remaining to maturity, with the shortest maturity on the ...
"the modern theory of rational behaviour under risk and uncertainty, usually described as Bayesian decision theory." Harsanyi rejects hedonistic utilitarianism as being dependent on an outdated psychology saying that it is far from obvious that everything we do is motivated by a desire to maximize pleasure and minimize pain. He also rejects ...
Chicken (game) The game of chicken, also known as the hawk-dove game or snowdrift game, [1] is a model of conflict for two players in game theory. The principle of the game is that while the ideal outcome is for one player to yield (to avoid the worst outcome if neither yields), individuals try to avoid it out of pride, not wanting to look like ...