Blog Posts

Below is a list of stocks that pay monthly dividends (i.e., monthly dividend stocks). A lot of these are real estate investment trusts (REITs) and many are business development companies (BDCs). Excluded from the list are oil and gas royalty trusts because of their higher risk. Some O&G royalty trusts may pay a monthly dividend, […]

The Russia-Ukraine conflict got people talking about reserve currencies. Specifically, what is the impact of war on reserve currencies? The US (which has large reserve status through the USD) and developed Europe (which has reserve status through the EUR and, to a lesser extent, the GBP) imposed sanctions on Russia to punish its economy and […]

There’s a lot of confusion regarding quantitative easing, also known as QE, and the impact on bond yields (longer-term interest rates). Quantitative easing is the secondary form of monetary policy after interest rate-driven policy. Once interest rate policy has been exhausted – when short-term interest rates are at about zero – then the focus shifts […]

Certain individuals holding certain types of assets in certain currencies face the biggest risk of wealth destruction today. Markets provide the biggest opportunities – and the biggest risks – when there are unsustainable flows in liquidity in places where the prices discount earnings or economic scenarios that are not likely to transpire. The risk of […]

Monte Carlo simulation is common when doing financial forecasts in order to determine how profitable the return on a certain asset of a given period of time might be. Monte Carlo simulation also allows us to take the sample size that was generated and calculate a couple of useful things. For one, we can ascertain […]

In this article, we’re going to look at a way to price American call options using another package in R, known as “AmericanCallOpt.” (American options are differentiated from European options in that with the former you can exercise before expiry. With the latter, there is no early-exercise option.) With this package, we can do the […]

Even some of the most basic questions about the markets are important as it pertains to understanding them, to get to kinow the mechanics involved in buying and selling stocks. When you fund a brokerage account and execute a trade, you tie up a certain amount of your money as collateral. As such, where does […]

The dividend discount model (DDM) is a method of valuing a company’s stock based on discounting the sum of all future dividends in terms of present value. In this case, we will be using a two-stage dividend discount model. Two-stage models tend to be the most common when evaluating firms. They entail valuing the amount […]

As an academic exercise, estimating or predicting the value of something or determining relationships between two or more variables is commonly done through linear regression methods. It is one of the most common statistical methods that individuals use to analyze data on a vast assortment of data. Can this be accurately be done with respect […]

An accretion/dilution analysis helps to determine the cost-effectiveness of a potential merger and acquisition (often termed M&A) deal. Mergers and acquisitions are made with the intention of improving the financial performance of each firm relative to what they could accomplish independently. This can be achieved by firms’ ability to reduce costs, combine talent and/or technology, […]