T internal rate of return (IRR) is a venerable technique for evaluating deterministic cash flow streams. Part of the difficulty in extending this measure to stochastic cash flows is the lack of coherent methods for accounting for multiple or nonexistent internal rates of return in deterministic streams. Recently such a coherent theory has been developed, and we examine its implications for stoc...

We study the link between volatility of exchange rates and interest rate differentials (IRD), motivated by importance currency carry trade activities in dynamics. examine this means an extended stochastic model, for which we detail efficient estimation strategy based on Gaussian mixture sampling a linearization process. apply approach to six pairs over period from January 1999 December 2017. Ou...