The paper shows that variables commonly used in takeover prediction models also help to explain the likelihood of several other restructuring events, including divestitures, bankruptcies and significant employee layoffs. This finding helps to explain the larger misclassification errors in binomial takeover prediction models commonly used in prior research. The results show that modelling takeov...

T decision analysis methods can provide an intuitive approach to valuing projects with managerial flexibility or real options. The discrete-time approach to real-option valuation has typically been implemented in the finance literature using a binomial lattice framework. Instead, we use a binomial decision tree with risk-neutral probabilities to approximate the uncertainty associated with the c...

A generalized correlated random walk is a process of partial sums Xk = ∑kj=1 Yj such that (X, Y ) forms a Markov chain. For a sequence (X) of such processes in which each Y j takes only two values, we prove weak convergence to a diffusion process whose generator is explicitly described in terms of the limiting behaviour of the transition probabilities for the Y. Applications include asymptotics...

OBJECTIVE Bad news disclosure is one of the complex communication tasks of the physicians. Bad news is defined as:" any news that adversely and seriously affects an individual's view of his or her future". Recent studies indicate that the patients' and physicians' attitudes toward disclosure of bad news have been changed since few years ago. The evidence of breaking bad news is also different a...

The increasingly dynamic nature of businessto-business electronic commerce has produced a recent shift away from fixed pricing and toward flexible pricing. Flexible pricing, as defined here, includes both differential pricing, in which different buyers may receive different prices based on expected valuations, and dynamic-pricing mechanisms, such as auctions, where prices and conditions are bas...

A systematic analysis of a continuous version of a binomial lattice, containing a real parameter γ and covering the Toda field equation as γ → ∞, is carried out in the framework of group theory. The symmetry algebra of the equation is derived. Reductions by one–dimensional and two–dimensional subalgebras of the symmetry algebra and their corresponding subgroups, yield notable field equations in...

Consider the task of summarizing the data in Figure 1. A common technique for performing this task is to use a statistical model known as a mixture model. Relative to many other models for estimating densities, mixture models have a number of advantages. First, mixture models can summarize data that contain multiple modes. In this sense, they are more powerful than distributions from the expone...

In this paper we study Binomial Models with random time steps. We explain, how calculating values for European and American Call and Put options is straightforward for the Random{Time Binomial Model. We present the conditions to ensure weak{convergence to the Black{Scholes setup and convergence of the values for European and American put options. Di erently to the CRR{model the convergence beha...

The simplest model for pricing d erivative securities is the binomial model. It generalizes the o n e period \up-down" model of Chapte r 1 t o a m ulti-period setting, assuming t hat t he price of the u nderlying asset follows a random walk. In the binomial model, there are N trading periods and N+1 trading d ates, t 0 t 1 ::: t N when it is possible to i n vest in a risky security with p r i c...

The paper reports an experiment on the pricing of financial options. Arbitrage-free option pricing is tested against three hypotheses based on mental accounting. The data show that, even with considerable experience, unexploited arbitrage opportunities persist. Subjects do not seem to make the connections between the different investment possibilities, as essential for arbitrage-free pricing (A...