Random walk and the arc-sine laws

Key words: The first arc-sine law, the second arc-sine law, coin tossing, random walks Brownian motion can be treated as a limit of random walks. Random walk can be simulated by tossing a fair coin. Suppose that there is an ideal coin tossing game in which each player wins or loses a constant amount with…

CVA/DVA calculation

Key words: Asset and Liability CVA, PD, LGD, EAD, DVA, EPE, ENE CVA is the value of the expected losses from counterparty defaulting and can be formulated as well as: СVA = Present Value of (PD * EAD * LGD) CVA – adjustment to the price of derivative to account for counterparty credit risk. It…

Probabilities of Default

Key words: CDS spreads, Cumulative, Conditional (probability intensities) and Unconditional probability of default, Survival probability Probability of default is a financial term describing the likelihood of a default over a particular time horizon. Measurement of the probability of default for a credit exposure over a given horizon is often the first step in credit risk…

Beggar-thy-neighbor policies

Key words: Imports distribution, International trade policies, Currency war, Dollar standard, Exchange rates  The beggar-thy-neighbor term describes economic policies that aim to enrich one country at the expense of other countries. Conventionally, the term is used in relation to such international trade policies as the application of import quotas and tariffs, regulation of corporation tax…

Calculating Enterprise Value

Key words: Core business operations, Operational items, Long-term funding sources Enterprise Value represents the value of the company’s Operating assets but there are many confusions when thinking about what to include. Take Shareholders Equity, add Debt and substract Non-operating assets. But what is the point of adding and substracting different items? The Enterprise Value calculation…

Measures of Variability

Key words: The Range, Mean Deviations, Variance, Standard and Median Deviations Let’s say you earned $1 one week, $10 the following week and $100 the third week. As it follows from the previous article, Measures of Central Tendency, the mean μ for this distribution is $37 per week. The mean reveals the center of the…

Measures of Central Tendency

Key words: Mode, Median, Mean The term “central tendency” determines a single value that best represents a distribution of data. A single value is needed to distinguish among multiple values when describing data. The mode, median and mean are the most common measures of central tendency. The mode, median and mean are all valid measures…

PM: Welcome to Marlboro Country

Key words: Marlboro, L&M, Parliament, Sampoerna A, Bond Street, Chesterfield, Philip Morris, Chesterfield, Lark, Fortune, Dji Sam Soe Philip Morris International (NNYSE:PM) Sector / Industry (GICS): Consumer Staples / Tobacco Employees: 80 200 Fiscal year ends: December 31 Headquarter: 120 Park Avenue, New York Products: manufactures & sells cigarettes, tobacco products & other nicotine products…

Wal-Mart: click and collect

Key words: Save people money so they can live better Wal-Mart Stores (NYSE:WMT) Sector / Industry (GICS): Consumer Staples / Food & Staples Retailing Employees: 2 300 00 Fiscal year ends: January 31 Headquarter: Bentonville, Arkansas Products: operates retail stores in various formats worldwide Rating (long-term): AA (S&P), Aa2 (Moody’s), AA (Fitch) Competitors: Target, Costco,…

Amazon.com: Don’t Buy Just Yet

Key words: Earth’s largest bookstore, seek to be Earth’s most customer-centric company Amazon.com, Inc. (NASDAQ:AMZN) Sector / Industry (GICS): Consumer Discretionary / Internet & Catalog Retail Employees: 230 800 Fiscal year ends: December 31 Headquarter: Seattle, Washington Products: retail sale of consumer products in North America and internationally Rating (long-term): AA-(S&P), Baa1(Moody’s) Competitors: Google, Amazon,…