The Financial Structure of a Life Office

1953 ◽  
Vol 21 ◽  
pp. 141-218 ◽  
Author(s):  
A. T. Haynes ◽  
R. J. Kirton
Keyword(s):  
Adverse Effects ◽  
Interest Rates ◽  
Financial Structure ◽  
General Level ◽  
Life Assurance ◽  
Market Rate ◽  
Asset Distribution ◽  
The Relationship

SynopsisThe authors' purpose in this paper is to analyse the financial structure of a life office and, in particular, the relationship between the assets and liabilities of a life assurance fund. This analysis is based upon the principle that the guarantees of future capital security and of long-term interest yield involved in the contracts issued by a life office should be backed either by “matched assets” providing equivalent guarantees of capital and interest or by sufficient free reserves to cover the possible adverse effects of departure from the “matched assets” position.In Parts I and II of the paper, the principle of “matched assets” is studied in relation to three model offices representing stationary and increasing funds operating under idealised conditions. For each model office the “standard” date-distribution of assets is determined–the distribution which, so far as possible, will insulate the fund from the effects of fluctuations in the market rate of interest upon existing assets and liabilities. The profit or loss resulting from “going long” or “going short”, as compared with the standard asset distribution, is then investigated against the background of a rise or a fall in the general level of interest rates.

scholarly journals Was the Gibson Paradox for real? A Wicksellian study of the relationship between interest rates and prices

2014 ◽  
Vol 21 (2) ◽  
pp. 139-163 ◽  
Author(s):  
Jagjit S. Chadha ◽  
Morris Perlman
Keyword(s):  
Interest Rates ◽  
Positive Relationship ◽  
Formal Model ◽  
Natural Rate ◽  
Market Rate ◽  
Long Run ◽  
Advanced Economies ◽  
The Uk ◽  
Gibson Paradox ◽  
The Relationship

We examine the relationship between prices and interest rates for seven advanced economies in the period up to 1913, emphasising the UK. There is a significant long-run positive relationship between prices and interest rates for the core commodity standard countries. Keynes ([1930] 1971) labelled this positive relationship the ‘Gibson Paradox’. A number of theories have been put forward as possible explanations of the paradox but they do not fit the long-run pattern of the relationship. We find that a formal model in the spirit of Wicksell (1907) and Keynes ([1930] 1971) offers an explanation for the paradox: where the need to stabilise the banking sector's reserve ratio, in the presence of an uncertain ‘natural’ rate, can lead to persistent deviations of the market rate of interest from its ‘natural’ level and consequently long-run swings in the price level.

scholarly journals THE DETERMINATION OF FINANCIAL STRUCTURE IN AGRICULTURE, FORESTRY AND FISHING INDUSTRY IN SELECTED COUNTRIES OF CENTRAL AND EASTERN EUROPE

2021 ◽  
Vol 24 (3) ◽  
pp. 58-78
Author(s):  
Petra Růčková ◽  
Nicole Škuláňová
Keyword(s):  
Interest Rates ◽  
Eastern Europe ◽  
Central And Eastern Europe ◽  
Current Knowledge ◽  
Generalized Method Of Moments ◽  
Financial Structure ◽  
Fishing Industry ◽  
Inflation Rates

Every economic sector, every single industry, every economy, and even every firm has its specific financial structure. Given that it is not possible to examine thousands of individual companies for scientific purposes, it is necessary to at least examine the differences between individual sectors, industries and countries. At the same time, the formation and optimization of the financial structure is influenced by a myriad of diverse factors that financial managers should take into account in their decisions. Thanks to these facts, more and more researches had been created for over half a century. This research expands knowledge in seven selected countries of Central and Eastern Europe – the Visegrád Group, Bulgaria, Slovenia and Romania. The aim of the research is to evaluate, based on the Generalized Method of Moments, the relationship between the six selected factors and the indebtedness level in companies belonging to the agricultural, forestry and fishing industry. The subject of the research is medium, large and very large companies during the years 2009 to 2016. The research deals with the influence of profitability, liquidity, asset structure, economic development, inflation and interest rates on the total, long-term and short-term indebtedness of companies. The main finding of the research is that companies are influenced by both internal and external determinants. However, even though the industry should be neutral, external determinants – GDP growth rates, inflation rates and interest rates – have a more significant impact on the debt level. The results of this research will not only extend current knowledge in the field of corporate finance, but at the same time, the results may be stimulating in setting support rules for public administration and even European institutions, as the selected industry is strongly linked to subsidy policies.

scholarly journals GENERAL ANALYSIS OF LONG-TERM INTEREST RATES

2020 ◽  
Vol 23 (01) ◽  
pp. 2050002
Author(s):  
FRANCESCA BIAGINI ◽  
ALESSANDRO GNOATTO ◽  
MAXIMILIAN HÄRTEL
Keyword(s):  
Interest Rates ◽  
Term Structure ◽  
Applied Mathematics ◽  
Mathematical Finance ◽  
Rational Model ◽  
No Arbitrage ◽  
Working Paper ◽  
Social Discounting ◽  
The Relationship

We introduce here the idea of a long-term swap rate, characterized as the fair rate of an overnight indexed swap (OIS) with infinitely many exchanges. Furthermore, we analyze the relationship between the long-term swap rate, the long-term yield, (F. Biagini, A. Gnoatto & M. Härtel (2018) Affine HJM Framework on [Formula: see text] and long-term yield, Applied Mathematics and Optimization 77 (3), 405–441, F. Biagini & M. Härtel (2014) Behavior of long-term yields in a lévy term structure, International Journal of Theoretical and Applied Finance 17 (3), 1–24, N. El Karoui, A. Frachot & H. Geman (1997) A note on the behavior of long zero coupon rates in a no arbitrage framework. Working Paper. Available at Researchgate: https://www.researchgate.net/publication/5066730) , and the long-term simple rate (D. C. Brody & L. P. Hughston (2016) Social discounting and the long rate of interest, Mathematical Finance 28 (1), 306–334) as long-term discounting rate. Finally, we investigate the existence of these long-term rates in two-term structure methodologies, the Flesaker–Hughston model and the linear-rational model. A numerical example illustrates how our results can be used to estimate the nonoptional component of a CoCo bond.

scholarly journals Adverse effects of hyperbilirubinemia on the development of healthy term infants

2016 ◽  
Vol 46 (2) ◽  
pp. 51
Author(s):  
I Made Arimbawa ◽  
Soetjiningsih Soetjiningsih ◽  
I K Kari
Keyword(s):  
Adverse Effects ◽  
Fine Motor ◽  
Term Infants ◽  
Gross Motor ◽  
Regression Test ◽  
History Of ◽  
Scale Test ◽  
The Relationship ◽  
Logistic Regression Test

Background Indirect hyperbilirubinemia is a common problem dur-ing the neonatal period and may cause long-term abnormality ordevelopmental delay.Objective To evaluate the adverse effects of hyperbilirubinemiaon the development of healthy term infants.Methods This was a prospective cohort study on healthy terminfants born in Sanglah Hospital, Denpasar. Mullen Scale Testswere performed at the ages of 3 and 6 months to assess subjects’development. Bivariate and multivariate analyses were conductedto examine the relationship between several dependent variablesand developmental outcomes.Results One hundred and twelve infants were enrolled in this study[56 with hyperbilirubinemia, 56 without hyperbilirubinemia; 58 (52%)male, 54 (48%) female]. Mean birth weight was 318.3 grams (SD342.26) vs 3162.5 grams (SD 338.61). At the age of 3 months,below average category according to Mullen Scale Test was higherin infants with history of hyperbilirubinemia compared to those with-out hyperbilirubinemia, which was statistically significant for finemotor scale (17.9% vs 5.4%; respectively; P=0.039; RR 1.66; 95%CI 1.15;2.39). At 6 months of age, it was higher in infants withhistory of hyperbilirubinemia compared to those without hyperbi-lirubinemia and this was statistically significant for gross motor scale(19.6% vs 3.6%, respectively; RR 1.86; 95%CI 1.36; 2.56; P=0.008)and fine motor scale (17.9% vs 5.4%, respectively; RR 1.66; 95%CI1.15; 2.39; P=0.039). Multivariate logistic regression test showedthat only hyperbilirubinemia was correlated with gross motor scaledelay at the age of 6 months (P=0.027; OR 5.97; 95%CI 1.22;29.12).Conclusion Healthy term infants with history of hiperbilirubinemiawere associated with increased gross motor scale delay at theage of 6 months

FINANCE FOR DEVELOPMENT

1979 ◽  
Vol 19 (1) ◽  
pp. 202
Author(s):  
B.L. Hamley
Keyword(s):  
Interest Rates ◽  
Capital Investment ◽  
Raw Materials ◽  
Banking System ◽  
Capital Requirements ◽  
Balance Of Payments ◽  
Local Participation ◽  
Domestic Savings ◽  
The Relationship

Australia's development capital requirements cannot be solely financed from domestic savings but need to be supplemented by overseas capital. Thus there should be no impediments to the inflow of overseas funds and variable deposit ratio controls (currently suspended) should be abolished.Overseas capital inflow is important for the balance of payments, as imports of capital goods are likely to rise during the developmental stage of large resource projects. Exports in subsequent years will provide the funds for amortization of borrowings.However the Australian capital markets can still provide for adequate local participation and funding. In particular, Australian banks have a capacity to finance our share of large projects, but it will be argued that a less controlled banking system will improve its long term ability in this regard.As a consequence the relationship between money supply management and interest rates will be discussed.Overall the capital needs of structural change will be reviewed with the conclusion that Australia is already turning its attention to capital investment in areas of comparative advantage - resource development, particularly beneficiation of raw materials.

scholarly journals US Stock Market And Macroeconomic Factors

2015 ◽  
Vol 32 (1) ◽  
pp. 325 ◽  
Author(s):  
Francisco Jareño ◽  
Loredana Negrut
Keyword(s):  
Stock Market ◽  
Interest Rates ◽  
Price Index ◽  
Consumer Price Index ◽  
Macroeconomic Factors ◽  
Significant Relationships ◽  
The Us ◽  
The Relationship ◽  
Relevant Factors

<p>This paper analyzes the relationship between the US stock market and some relevant US macroeconomic factors, such as gross domestic product, the consumer price index, the industrial production index, the unemployment rate and long-term interest rates. All the relevant factors show statistically significant relationships with the stock market except for the consumer price index, and the signs are consistent with the findings of previous literature.</p>

scholarly journals Taux d’intérêt à long terme, martingales, et marchés efficients

2009 ◽  
Vol 55 (3) ◽  
pp. 360-374
Author(s):  
Charles Freedman
Keyword(s):  
Interest Rates ◽  
Empirical Work ◽  
Bond Market ◽  
Bond Markets ◽  
Bond Prices ◽  
Martingale Process ◽  
The Relationship ◽  
Special Case

This note discusses some aspects of the relationship between the hypothesis that long-term bond rates follow a martingale process and the hypothesis that the bond market is efficient. It begins with some mathematics of bond prices and interest rates. It then shows that, except in one special case, the hypothesis that bond rates follow a martingale and that bond markets are efficient are theoretically inconsistent. Some empirical work is then adduced that shows that neither hypothesis is supported by the data. It concludes with some brief comments on the literature relating to this subject and some suggestions for further research.

The Term Structure of Interest Rates and the Evaluation of Forestry Investments: A Note

1988 ◽  
Vol 12 (4) ◽  
pp. 256-258
Author(s):  
F. Christian Zinkhan
Keyword(s):  
Interest Rates ◽  
Term Structure ◽  
Discount Rate ◽  
Net Present Value ◽  
Present Value ◽  
Term Structures ◽  
Forestry Investments ◽  
The Relationship

Abstract The forestry literature generally assumes that the appropriate discount rate to be used in the estimation of a given investment's net present value is the same over its lifetime. However, the values of many alternative investments such as stocks and bonds often reflect term structures that are not flat. That is, the relationship between the number of years to maturity of an investment and that investment's required rate of return is often a significant consideration. This note suggests a procedure for incorporating a consideration of the term structure of interest rates into the determination of a discount rate specific to each annual net cash flow associated with a given long-term forestry investment. Using an actual 10-year case analysis, it was found that the valuation of a timberland tract varied by approximately 11%, depending upon whether or not the term structure of interest rates was recognized. South. J. Appl. For. 12(4):256-258.

English Bank Business Loans, 1920–1968: Transaction Bank Characteristics and Small Firm Discrimination

2005 ◽  
Vol 12 (2) ◽  
pp. 135-171 ◽  
Author(s):  
MICHAEL COLLINS ◽  
MAE BAKER
Keyword(s):  
Interest Rates ◽  
Commercial Banks ◽  
Detailed Comparison ◽  
Business Sector ◽  
Primary Research ◽  
Public Companies ◽  
Long Period ◽  
New Information ◽  
The Relationship

The article reports the results of primary research aimed at eliciting new information on the nature of the relationship between english banks and the business sector over the long period, 1920–68. Bank archives have been used to conduct a microeconomic study of lending by english commercial banks to business clients. Three sets of results are reported. First, on the basis of a sample of over four thousand individual business loans, new data are presented on the nature and duration of business loans, the purposes for which they were used, the banks' requirements regarding collateral and interest rates charged. Secondly, the parameters governing bank practice are examined through the presentation of the reasons for which one of the leading clearing banks, the midland, turned down requests for business loans from a subset of firms. Thirdly, a detailed comparison is made of the loans granted to small private firms and to larger public companies; and regression analysis is used to assess the banks' treatment of the two groups. The data are presented within the theoretical framework of english ‘transaction banking’ which, it is argued, offers a strong rationale for the reported continuity in bank practice over the long term.

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