Musings on Markets
JANUARY 19, 2022
Leading into 2021, the big questions facing investors were about how quickly economies would recover from COVID, with the assumption that the virus would fade during the year, and the pressures that the resulting growth would put on inflation.
Musings on Markets
FEBRUARY 10, 2021
The vehicle that I use to convey country risk into hurdle rates is the equity risk premium , the price of risk in equity markets, that I talked about in my earlier post on the topic. US , Europe , Emerging Markets , Japan , Australia/NZ & Canada , Global ) 2. Cost of equity in US $ for German project = 1% + 1.1
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Musings on Markets
JANUARY 27, 2022
Inflation numbers have been coming in high now, for more than a year, but for much of the early part of 2021, bankers, investors and politicians seemed to be either in denial or casually dismissive of its potential for damage.
Musings on Markets
JULY 13, 2022
lived under full democracy, in 2021, with large differences across regions. Country Risk: Currency and Cost of Capital As a final part to this post, to see the shifts in country risk that we have seen in 2022, let’s start with an assessment of risk free rates.
Musings on Markets
AUGUST 15, 2023
In every introductory finance class, you begin with the notion of a risk-free investment, and the rate on that investment becomes the base on which you build, to get to expected returns on risky assets and investments. What is a risk free investment? Why does the risk-free rate matter?
Musings on Markets
MARCH 25, 2021
The first quarter of 2021 has been, for the most part, a good time for equity markets, but there have been surprises. The first has been the steep rise in treasury rates in the last twelve weeks, as investors reassess expected economic growth over the rest of the year and worry about inflation. for 2021 and inflation of 2.2%
Brian DeChesare
AUGUST 31, 2022
The risk-free rate is higher – because investors benefit from “delaying” their eventual purchase of the underlying shares when they earn higher interest elsewhere. The risk-free rate and time to maturity also affect the Liability component (and other factors, such as the company’s credit quality, play a role).
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