Knowledge that Transforms

The application of linear programming techniques to the problem of capital budgeting has repeatedly been proposed in the literature. However, while the potential of linear programming models for this important area of business decisions is generally recognized, practical applications still face some severe limitations. This note focuses on one particular problem peculiar to the application of programming techniques to capital budgeting, namely the mutual dependence between the optimal solution of the linear programming model and the discount rate used to calculate the coefficients of its objective function.

Thomas H. Mayor, Short Trading Activities and the Price of Equities: Some Simulation and Regression Results, The Journal of Financial and Quantitative Analysis, Vol. 3, No. 3, Special Issue: Random Walk Hypothesis (Sep., 1968), pp. 283-298

The basic idea behind the random walk hypothesis is that in a free competitive market the price currently quoted for a particular good or service should reflect all of the information available to participants in the market that influence its present price. To the extent that future conditions of the demand or supply are currently known, their effect on the current price should be properly taken into account.

Alan J. Zakon, James C. Pennypacker, An Analysis of the Advance-Decline Line as a Stock Market Indicator, The Journal of Financial and Quantitative Analysis, Vol. 3, No. 3, Special Issue: Random Walk Hypothesis (Sep., 1968), pp. 299-314

Determining the market values of streams of future returns is a task common to many sorts of economic analysis. The literature on this subject is extensive at all levels of abstraction. However, most work has not taken uncertainty into account in a meaningful way.

F. E. James, Jr., Monthly Moving Averages--An Effective Investment Tool?, The Journal of Financial and Quantitative Analysis, Vol. 3, No. 3, Special Issue: Random Walk Hypothesis (Sep., 1968), pp. 315-326

An abstract is not available for this content so a preview has been provided. As you have access to this content, a full PDF is available via the ‘Save PDF’ action button.

An abstract is not available for this content so a preview has been provided. As you have access to this content, a full PDF is available via the ‘Save PDF’ action button.

An abstract is not available for this content so a preview has been provided. As you have access to this content, a full PDF is available via the ‘Save PDF’ action button.