vania-janet/multiturn-rag-retrieval-data huggingface dataset:
"I got $3394.83 The first problem with this is that it is backwards.  The NPV (Net Present Value) of three future payments of $997 has to be less than the nominal value.  The nominal value is simple:  $2991.   First step, convert the 8% annual return from the stock market to a monthly return.  Everyone else assumed that the 8% is a monthly return, but that is clearly absurd.  The correct way to do this would be to solve for m in  But we often approximate this by dividing 8% by 12, which would be .67%.  Either way, you divide each payment by the number of months of compounding.   Sum those up using m equal to about .64% (I left the calculated value in memory and used that rather than the rounded value) and you get about $2952.92 which is smaller than $2991.   Obviously $2952.92 is much larger than $2495 and you should not do this.  If the three payments were $842.39 instead, then it would about break even.   Note that this neglects risk.  In a three month period, the stock market is as likely to fall short of an annualized 8% return as to beat it.  This would make more sense if your alternative was to pay off some of your mortgage immediately and take the payments or yp pay a lump sum now and increase future mortgage payments.  Then your return would be safer.   Someone noted in a comment that we would normally base the NPV on the interest rate of the payments.  That's for calculating the NPV to the one making the loan.  Here, we want to calculate the NPV for the borrower.  So the question is what the borrower would do with the money if making payments and not the lump sum.   The question assumes that the borrower would invest in the stock market, which is a risky option and not normally advisable.  I suggest a mortgage based alternative.  If the borrower is going to stuff the money under the mattress until needed, then the answer is simple.  The nominal value of $2991 is also the NPV, as mattresses don't pay interest.  Similarly, many banks don't pay interest on checking these days.  So for someone facing a real decision like this, I'd almost always recommend paying the lump sum and getting it over with.  Even if the payments are ""same as cash"" with no premium charged."
A market downturn is a great opportunity to pick up valuable stocks at low prices but do note that this is quite a risky proposition and requires abundant research. But again, as is mentioned in previous answers, the start of the downturn is evident only in hindsight, and it is always advisable to have a balanced/diversified portfolio, risking only what you can afford to lose. In any case, indices like Dow Jones, NASDAQ, S&P500 are calculated on the basis of only a few companies that broadly represent their individual sectors.
By hedging I mean that in these cases long term investments are made in anti-correlated securities to obtain a diversified portfolio with a very stable growth. This one is calculated normally annually because you rely on the Annual Risk-Free Rate. Having that in mind I think you can guess that the Average Largest Drawdown is the average between the Largest/Maximum Drawdown from each security in the portfolio. And this doesn't make sense in a trading system. Example: If you have invested in 5 different securities where we calculated the Largest Draw-down for each, such as represented in the following array: MaxDD[5] = { 0.12, 0.23, 0.06, 0.36, 0.09 }, in this case your Average Largest Draw-down is the average(MaxDD) that equals 0.172 or 17,2% If your portfolio's annual return is 15% and the Risk-free Rate is 10%, your Sterling Ratio SR = (0.15 - 0.10)/0.172, which result to 0.29. The higher the rate better is the risk-reward ratio of your portfolio. I suggest in your case to only use the original Sterling Ratio to calculate your long-term risk-reward, in any other case I suggest looking at the Sharpe and Sortino ratios instead.
I think the primary reason it is so pricey now is that it is an inflation hedge, and considering how shaky the economies and out of control the spending is in many countries right now, people are running to it as a safe harbor. The increased demand raises the price as it does with any asset.  This brings us to the titular question. Why does gold have value? The same reason anything has value. There is someone out there who wants it enough to trade something else of value to get it.  It is in the news so much because it is so high right now, which unfortunately is going to cause a lot of people to foolishly invest in it at likely the worst possible time.
Investopedia states: While early exercise is generally not advisable, because the time   value inherent in the option premium is lost upon doing so, there are   certain circumstances under which early exercise may be advantageous.   For example, an investor may choose to exercise a call option that is   deeply in-the-money (such an option will have negligible time value)   just before the ex-dividend date of the underlying stock. This will   enable the investor to capture the dividend paid by the underlying   stock, which should more than offset the marginal time value lost due   to early exercise. So the question is how well do you see the time value factor here?
"Ah, two things!  First, there isn't a small state with capitalism.  Capitalism requires LOTS of support from a state.   For example, there needs to be a functioning judicial system to settle disputes and to enforce all sorts of laws that benefit capitalism.  There also needs to be large investments in infrastructure, including infrastructure that would be impossible for a private entity to build and run.  Also, capitalism has this thing called ""business cycles.""  We have had two now in the past 80 years that required MASSIVE state intervention in order to save capitalism itself.  You say you are in favor of democracy, but that doesn't extend to the enterprise?  Wouldn't democracy also include workers being able to own and vote how a company is run.  How is it democratic for the person with the most shares (and thus the most money) to have the most votes.  Even in our political ""democracy"" capital has a giant corrupting influence.  One only has to look at our current government to see that influence."
I still don't fully understand how gold is debt. I get that you made the connection that gold is money, and previously explained how money is debt. But that doesn't make gold debt.  Gold is a commodity just as oil, apples, deer, shoes, etc. It might not provide any utility, but is still something people have come to value in and of itself.
"Gold is not an investment.  Gold is a form of money.  It and silver have been used as money much longer than paper.  Paper money is a relatively recent invention (less than 350 years old) with a horrible track record of preserving wealth.  When I exchange my paper US dollars for gold I'm exchanging one form of money for another.  US dollars, or US Federal Reserve Notes to be more precise, can be printed ad nauseam by one bank that is totally private and is never audited.  Keeping all of your savings in US dollars is ignoring history, it is believing the US Federal Reserve has your best interest in mind, it is hoping that somehow things will be different this time, it is believing that the US dollar will somehow magically be the first fiat currency to last a person's lifetime. TIPS may seem like a good hedge against inflation.  However, the government offering TIPS is also the same government that is calculating the inflation rate used to adjust TIPS.  What a great deal.  If you do some research you discover that the method for calculating the consumer price index is always ""modified"" since it is always found to over estimate inflation.  It is never found to under estimate inflation.  Imagine that.  Here is a chart showing the inflation rate as if it were calculated the same way as it was calculated in 1980. Buying any government debt is also a way to guarantee you or your children will be taxed in the future since the government will have to obtain the money from someone to pay back bonds.  It's like voting for future taxes."
Yes, the choice of some of the base stats to use is pretty interesting. I'm not an expert in using FRED, but I think there are better numbers for a lot of those. Mostly it's about things like the origin of the graph though - look how many of the graphs on that page start in the mid fifties, not zero, thus magnifying things drastically. Also graphing numbers that aren't calculated the same way on the same graph - FRED does not fix your poor assumptions.
"This is (almost) a question in financial engineering. First I will note that a discussion of ""the greeks"" is well presented at https://en.wikipedia.org/wiki/Greeks_(finance) These measures are first, second and higher order derivatives (or rate of change comparisons) for information that is generally instantaneous. (Bear with me.) For example the most popular, Delta, compares prices of an option or other derived asset to the underlying asset price. The reason we are able to do all this cool analysis is because the the value of the underlying and derived assets have a direct, instantaneous relationship on each other. Because beta is calculated over a large period of time, and because each time slice covered contributes equally to the aggregate, then the ""difference in Beta"" would really just be showing two pieces of information: Summarizing those two pieces of information into ""delta beta"" would not be useful to me. For further discussion, please see http://www.gummy-stuff.org/beta.htm specifically look at the huge difference in calculation of GE's beta using end-of-month returns versus calculation using day-before-end-of-month returns."
It's all a pretty fine line, it wouldn't take many defaults to turn my annual return negative; though in 5 years it hasn't happened yet. Considering only monthly charge-offs against monthly non-principle receipts I had two net negative months in 2015. I made about a net 4.5% annual return on my average monthly outstanding principle for calendar 2015. When I log in to my Prosper account it claims my return is closer to 7.5% (I'm not sure how that number is calculated). The key is diversifying your risk just like a bank would. I don't know how the other services function at a nuts and bolts level. With prosper I choose which loans to fund which means I determine my risk level. I assume the other services function similarly. Regarding collection of charged-off loans. I don't know how much real effort is expended by Prosper. I've had a few notes sold for about 10% of the outstanding balance; and I don't know who they were sold to. Comically, I have loan that's made more payments in collections than when it was in good standing. There is definitely more to this than handing over $15,000 and receiving 6% on it.
It's really a calculated risk. The most you gain is for the growth to be tax free, the downside (for the excess funds)is the growth is taxed plus the 10% penalty. I'd suggest a simple strategy. Deposit as much as you can, early on, until the balance approaches the current 4 yr college cost. Then, just add enough to match the current cost, i.e. If college costs grow more than the account, just make up that difference.
A constant answer which I see brought up in a variety of forums is the complaint that schools don't teach money management (budgeting) and how to do taxes.  Another good bit of information would be to take apart a credit card statement, show how the interest is calculated, etc.  I'd start with those topics, which might take a bit of research on your part (many adults don't understand many of these concepts either), and then build from there.   I remember the first time I was able to go from a list of transactions on a credit card statement, and calculate the interest owed from the average daily balance, and it was like a light coming on.  Most people use these concepts on a regular basis, but have no conception of what's going on beneath the surface.
There are two ways to measure the value of money in the past. 1) As Victor mentioned there are inflation statistics covering the last 100 or so years that value the currency against an ever-changing basket of goods. This is sufficient when measuring general inflation over the period of the hundred years where there is data. This is how it was measured in your example. 2) For older time periods or where a value comparison is required between specific items (particularly where these were not in the basket of goods used for the inflation calculation) Historical records of the price of comparable goods can be used. This is in effect the same as mark to market valuations for illiquid financial instruments and requires poring through records to find the price of either a comparable basket of goods to one that would be used for inflation calculations today or a comparable set of items. An example of this is finding the value of a particular type of house (say a terraced house in London) in the 19th Century compared to the same house today by finding records of how much comparable houses would sell for, on average, then and now. This second measure is also used where the country in question didn't or doesn't keep reliable inflation statistics which may well be true of Colombia in the 90s. This means that there is a chance that this way of estimating Escobar's wealth in today's terms may have also been used. Another notable reason to use this methodology is that (unless you are using exchange rates in purchasing power parity terms) the value of money held in different currencies is different. This is even true today as the value of $1 in INR in India is likely to be higher than the value of a dollar in the US in terms of what you can buy. Using this methodology allows for a more accurate comparison in values where different countries and currencies are involved.
The GuruFocus Link is just reporting the high and low price of the quarter.  Price Range (Average) – The estimated trade prices. The average price   is calculated from the time weighted average during the period. If no   price range is shown, the trade prices are estimated trade prices,   which are more accurate estimates. AAPL: $420.05 - $549.03 ($467.26) The numbers for the high and low match what I found for AAPL on Yahoo Finance. Keep in mind their definition uses estimate 3 times.
"&gt;I mean, if this were the mortgage market, you would be arguing to banks ""What the hell made you think this homeowner would keep paying you 6% interest on this money when you're not providing any kind of value twenty years later?""   That's not how pensions work. A pension is your money. The value is the value you've put into it over the years. $400 a month for 30 years shouldn't go away just because you aren't putting monthly amounts in any more. There is either capital left in the account, or their isn't."
The 1.140924% is calculated by taking 13.69%/12 = 1.140924%. Dividing this number by 100 gives you the answer 1.140924 / 100 = .01140924. When dealing with decimals it's important to remember the relationship between a decimal and a percent. 1% = .01 To return .01 to a percent you must multiple that number by 100.  So .01 x 100 = 1% In order to get a decimal from a percent, which is what is used in calculations, you must divide by 100. So, here if we are trying to calculate how much interest you are paying each month we can do this: 9800 * .1369 = $1341.62 (interest you will pay that year IF the principal balance never changed) 1341.62 / 12 = ~111.81 Now, month two 9578.34 * .1369 = 1311.274746 1311.274746 / 12 = 109.28 In order to get your monthly payments (which won't change) for the life of the loan, you can use this formula: Monthly payment = r(PV) / (1-(1+r)^-n) Where:  r= Interest Rate (remember if calculating monthly to do .1369/12) PV= Present Value of loan n=time of loan ( in your case 36 since we are talking monthly and 12*3 = 36) from here we get: [(.1369/12)*9800]/(1-(1+.1369/12)^-36) = $333.467 when rounding is $333.47 As far as actual applied interest rate, I'm not even sure what that number is, but I would like to know once you figure out, since the interest rate you're being charged is most definitely 13.69%.
You need to determine for the taxing jurisdiction when the next tax appraisal will be done. In some cases the appraisal is done every year, or two, or three. In other cases it is also done when the property is sold. The county tax office website should contain this information. They will also have information on how to appeal. Most jurisdictions do have a way of looking up not only the rates but the value of the property in question. You will also be interested in determining if the tax value of the property is lower due to local/state laws that limit the growth in value from one assessment to another. A sale of the property could trigger a catchup for the value. It is possible that the degraded value of the home has already been factored into the assessment. It is also possible that it hasn't. Keep in mind that taxes in some jurisdictions can be more complicated because there is also a town/city/county component, and some places that also breakout other items on the tax bill like storm water management, schools, pest spraying. These other items can be based on value, square footage of the lot, or a flat amount. You should get a local opinion on the likelihood of a successful appeal, and how much adjustment you would be able to get. Depending on the sale date and the due date for the taxes, you may be forced to pay the higher tax rate for a while until either the next re-appraisal or the next appeal window.  Note: the fact that it is being auctioned may mean that what you pay for the house may be immaterial because the tax authorities could determine that the motivation to sell quickly could have depressed the value. This type of sale will not impact the value of other houses and can't be used as a basis for determining the value of other properties.
However, a riskless arbitrage (buy synthetic long, short the stock) was not possible, and that's why the prices were messed up. Another basic relationship that should hold is put-call parity: http://en.wikipedia.org/wiki/Put%E2%80%93call_parity Undervalued/overvalued options, pt. 2: Assuming the relationship to the underlying is sane (synthetic positions equivalent to actual positions) then the valuation of the option could focus on volatility. That is, the time value of the option implies the stock will move a certain amount. If the time value is high and you think the stock won't move much, you might short the option, while if the time value is low and you think the stock will move a lot, you might buy the option. You can get implied volatility from your broker perhaps, or Morningstar.com for example has a bunch of data on option prices and the implied components of the price model. I don't know how useful this really is though. The spreads on options are so wide that making money on predicting volatility better than the market is pretty darn hard. That is, the spread probably exceeds the amount of the mispricing. The price of the underlying is more important to the value of an option than the assumed volatility. How many contracts: Each contract is 100 shares, so you just match that up. If you want to hedge 100 shares, buy one contract. To get the notional value of the underlying multiply by 100. So say you buy a call for $30, and the stock is trading at $100, then you have a call on 100 shares which are currently priced at $10,000 and the option will cost $30*100=3,000. You are leveraged about 3 to 1. (This points to an issue with options for individual investors, which is that one contract is a pretty large notional value relative to most portfolios.)"
If the check is written as a check to BigCo, it is less clear how Jack can compensate himself for the equity sale. It is as if the equity was owned by the corporation, not by Jack. This is correct. If the check is written to BigCo, then it is BigCo issuing new shares. Jack doesn't compensate himself for the equity sale, as he didn't sell anything. The company traded shares for money which it uses for expansion. In the long term, the capital gain from expansion may exceed the value of a $200,000 no-interest loan to the company. If the value of the company before investing $250,000 is $1 million, then the value after investing is $1.25 million. So $250,000 is 20% of the value of the company. BigCo should not give the buyer 25% of BigCo but only 20% in that example. If it does give 25%, the buyer is getting a $312,500 stake for only $250,000. With the other example, Jack sells 25% of the company for $250,000 from his personal shares. This doesn't change the assessed value of the company, just Jack's stake. Jack then loans the company $200,000. This also doesn't change the assessed value of the company (at least in theory). It gains $200,000 but has an offsetting debt of $200,000. In net, that's no change. Assets and liabilities balance the same. So if you know that the assessed value of the company is $1 million and that the buyer is paying $250,000 for a 25% stake at that same valuation, then you know that the check is being written to Jack. If the check is written to BigCo, then one or more of those numbers is incorrect. The buyer could be getting a 20% stake. The new value of the company after the investment is $1.25 million. Or paying $333,333.33. The new value of the company after the investment is $1,333,333.33. Or BigCo could only be worth $750,000 before the investment.
Typically a private company is hit by demand supply issues and cost of inputs. In effect at times the cost of input may go up, it cannot raise the prices, because this will reduce demand. However certain public sectors companies, typically in Oil & Engery segements the services are offered by Public sector companies, and the price they charge is governed by Regulatory authorities. In essence the PG&E, the agreement for price to customers would be calculated as cost of inputs to PG&E, Plus Expenses Plus 11.35% Profit. Thus the regulated price itself governs that the company makes atleast 11.35% profit year on year. Does this mean that the shares are good buy?  Just to give an example, say the price was $100 at face value, So essentially by year end logically you would have made 111.35/-. Assuming the company did not pay dividend ... Now lets say you began trading this share, there would be quite a few people who would say I am ready to pay $200 and even if I get 11.35 [on 200] it still means I have got ~6% return. Someone may be ready to pay $400, it still gives ~3% ... So in short the price of the stock would keep changing depending how the market percieves the value that a company would return. If the markets are down or the sentiments are down on energy sectors, the prices would go down.  So investing in PG&E is not a sure shot way of making money. For actual returns over the years see the graph at http://www.pgecorp.com/investors/financial_reports/annual_report_proxy_statement/ar_html/2011/index.htm#CS
I'd say that it cannot be meaningfully calculated or measured because the two are just too different in every way. Poker Stock trading I guess the last point (that someone relying on luck is exploitable in poker but not in stock trading) could be interpreted as stock trading being based more on luck, while the second and third points indicated that poker has more true randomness and is thus based more on luck. Something both have in common is that people who have been losing money are often tempted to take stupid risks which lose them everything.