This paper analyzes the effect of the Earned Income Tax Credit (EITC) on investment income. Policy-makers have devoted substantial time and resources toward increasing the saving rate of low-income households, yet the EITC provides a substantial disincentive for individuals to save and realize investment income. I find a one percent increase in the aftertax return to saving causes a 3.05 percen...

Rational investor hypothesis, efficient markets hypothesis(EMH), and random walk of yield rate are three basic concepts of modern capital market theory. However, it could not be proved that real capital markets are full with rational investors. The theory, which regards the price movement of capital market as random walks, and regards the yield time series as a normal distribution, is not suppo...

Quantitative stock selection has become a research hotspot in the field of investment decision. As the data mining technology becomes mature, quantitative stock selection has made great progress. From the perspective of value investment, this paper selects top 200 stocks of A share in terms of market value. With the random forest (RF), financial characteristic variables with significant impact ...

We study the economic viability and optimal sizing and siting of a hybrid plant that combines a ringwall hydro storage system with wind and solar power plants (ringwall storage hybrid power plant, RSHPP). A real options model is introduced to analyze the economics of an onshore RSHPP, and in particular of the varying storage volume in light of the stochastic character of wind and solar power, a...

It has been long recognized that endogenous default probabilities cannot explain spreads between corporate and the riskless bonds. Recently, this issue has been subjected to rigorous scrutiny. Previous studies have found that for investment-grade debt, structural models explain only 15-25% of the observed spreads. On the other hand, for the high-yield debt, the structural models exaggerate actu...

This paper investigates the stock characteristic preferences of active Australian equity managers. We examine the following characteristics: stock price variance, momentum, size, transaction costs, earnings yield, analyst coverage and the standard deviation of analyst forecasts. In aggregate we find that active managers exhibit preferences for stocks exhibiting high price variance, large market...

This paper studies asset allocation decisions in the presence of regime switching in asset returns. We find evidence that four separate regimes characterized as crash, slow growth, bull and recovery states are required to capture the joint distribution of stock and bond returns. Optimal asset allocations vary considerably across these states and change over time as investors revise their estima...

We integrate a widely accepted version of the separation of ownership and control Jensen’s (1986) free cash flow theory into a dynamic equilibrium model and study the effect of imperfect corporate control on asset prices and investment. Aggregate free cash flow of the corporate sector is an important state variable in explaining asset prices, investment, and the cyclical behavior of interest ra...

This article shows that, contrary to the suggestion of some investment advisers, for an individual Canadian investor subject to personal income taxation, the after-tax yield on a discount bond is always higher than (or, at worst, equal to) the yield on a premium bond. * Of the Department of Economics, University of Alberta, Edmonton. We thank the editors of this journal and two anonymous review...

This study investigated the mechanical properties and single crown accuracy of the tailor-made Fourth University Stomatology investment (FUS-invest) for casting titanium. Background. Current investment for casting titanium is not optimal for obtaining high-quality castings, and the commercially available titanium investment is costly. Methods. Titanium specimens were cast using the tailor-made ...