This article presents a dynamic equilibrium model of firm valuation under the risk of expropriation. It was determined that equilibrium weighted average value of capital of such firm should be increased by the probability of expropriation. There has proposed a model that determines the...

• The first ever explicit formulation of the concept of an option's probability density functions has been introduced in our publications "Breakthrough in Understanding Derivatives and Option Based Hedging - Marginal and Joint Probability Density Functions of Vanilla Options -- True...

The “market” is too complex to model deterministically, and as a result it is impossible to deterministically and accurately price assets within the market. Nevertheless, the vast majority of financial asset pricing models, such as the Capital Asset Pricing Model (CAPM), are employed as...

Frank P Ramsey did not consider the possibility of representing the concept of probability by an interval valued approach in his lifetime. Ramsey considered probability to be either ordinal or numerical. There was absolutely no room for interval estimates and interval probability in his...

The Townshend–Keynes exchanges over decision making, weight of the argument (evidence), non numerical probabilities (Keynes’s term for Boole’s constituent probabilities, used in The Laws of Thought in 1854, that appears on page 163 of the A Treatise on Probability in chapter 15 on inexact...

Starting with J. Muth’s unsupported and unsupportable claims, originally made in 1961, that “rational expectations” were subjective probability distributions that were distributed around a known, true, objective probability distribution, various economists have provided the same type of...

J M Keynes rejected Ramsey's subjective theory of probability in general. He did accept Ramsey's betting quotient approach in the special case where the weight of the evidence, w, equaled one so that all the probabilities were linear, additive, precise, exact, definite, single number answers. In...