We propose an approach to optimally select corporate bond portfolios based on bond-specific characteristics (maturity, credit rating, coupon, illiquidity, past performance, and issue size) and macroeconomic conditions (recessions and macroeconomic uncertainty measures). The approach relies on a parametric specification of the portfolio weights and allows us to consider a large cross-section of ...

This paper focuses on the question of neuronal differences in the evaluation of hypothetical and real payoffs. Previous research in experimental economics (e.g. Holt and Laury 2002) has shown that there are differences in subjects’ behavior when evaluating hypothetical and real payoffs. We conducted a two sessions EEG-experiment with high-stake payoffs. We used the certainty equivalent method f...

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...

The fragility of livelihoods and hence the vulnerability of consumption growth due to aggregate shocks in the Indian rural sector have been highlighted recently. However, as yet there exist no estimates of the vulnerability of consumption growth in rural India. This paper attempts to fill this lacuna by providing certainty equivalent growth of consumption in 14 major states of India over the pe...

critical thinking is necessary to read the scientific literature. however, in addition to questions about the science, often one must also question the meaning of the text. this article provides an example of the analyses needed to understand a single sentence. in so doing, it raises several interesting issues of meaning, measurement, statistical analyses, and the form in which results are pres...