no third solution » Archive
NPV?
If you aren’t very good at math, check out some of my other posts. This won’t interest you. If you are very good at math, I need your assistance, because I’m not. If you’re worried about “academic dishonesty,” don’t be. I don’t have any classes this summer. I understand that the NPV of a consol bond or perpetuity would be C/(1+r) where C is the stated coupon rate, and r is the discount rate. Let’s assume that C is expected to grow by g% each year, and that this instrument is also a perpetuity. What would be the mathematical expression for such an instrument? For practicality’s sake, assume g < r This is as far as I can get: NPV = Sum of … Read entire article »
Filed under: Potpourri
Reefer Madness
A British study indicates that a marijuana cigarette is five times more harmful than a tobacco cigarette. Actually, the study says “up to five times” as harmful. OK, considering most people smoke their joints without a filter, it’s plausible. But, did you catch the sleight of hand? Smoking “a joint” is more dangerous than “a cigarette,” therefore, smoking marijuana is more dangerous than smoking tobacco. Which commits the same error as the old diamond-water paradox, in treating things as abstract concepts only, such as “diamonds” or “marijuana.” When you treat things thusly, you can draw some pretty awful conclusions – like, “an object’s value is derived from the cost of the labor required to obtain it.” But enough econ-speak, this isn’t … Read entire article »
Filed under: Drug War Rants