Related papers: Natural Asset Beta
Net Asset Value (NAV) calculation and validation is the principle task of a fund administrator. If the NAV of a fund is calculated incorrectly then there is huge impact on the fund administrator; such as monetary compensation, reputational…
Theory purports that animal foraging choices evolve to maximize returns, such as net energy intake. Empirical research in both human and nonhuman animals reveals that individuals often attend to the foraging choices of their competitors…
This paper introduces the concept of a global financial market for environmental indices, addressing sustainability concerns and aiming to attract institutional investors. Risk mitigation measures are implemented to manage inherent risks…
Asset liquidity in modern financial markets is a key but elusive concept. A market is often said to be liquid when the prevailing structure of transactions provides a prompt and secure link between the demand and supply of assets, thus…
We estimate the loss of value that companies might suffer from nature overexploitation. We find that global equities shed 26.8% in a scenario of unabated nature decline, while the worst-performing firms lose ~75% of their value. Our risk…
Capital allocation principles are used in various contexts in which a risk capital or a cost of an aggregate position has to be allocated among its constituent parts. We study capital allocation principles in a performance measurement…
Valuing mineral assets is a challenging task that is highly dependent on the supply (geological) uncertainty surrounding resources and reserves, and the uncertainty of demand (commodity prices). In this work, a graph-based reasoning,…
Although climate and nature related scenario analysis is increasingly important in finance, operational implementations remain limited for translating long horizon environmental scenarios into counterparty credit risk measures used in…
We consider a financial market in which two securities are traded: a stock and an index. Their prices are assumed to satisfy the Black-Scholes model. Besides assuming that the index is a tradable security, we also assume that it is…
Beta is a widely used quantity in investment analysis. We review the common interpretations that are applied to beta in finance and show that the standard method of estimation - least squares regression - is inconsistent with these…
Providing a measure of market risk is an important issue for investors and financial institutions. However, the existing models for this purpose are per definition symmetric. The current paper introduces an asymmetric capital asset pricing…
In general it is not clear which kind of information is supposed to be used for calculating the fair value of a contingent claim. Even if the information is specified, it is not guaranteed that the fair value is uniquely determined by the…
This study explores the potential of the cybernetic method of inquiry for the problem of natural resource governance. The systems way of thinking has already enabled scientists to gain considerable headway in framing global environmental…
Among the various factors affecting the firms positioning and performance in modern day markets, capital structure of the firm has its own way of expressing itself as a crucial one. With the rapid changes in technology, firms are being…
An asset pricing model using long-run capital share growth risk has recently been found to successfully explain U.S. stock returns. Our paper adopts a recursive preference utility framework to derive an heterogeneous asset pricing model…
Sustainability encompasses three key facets: economic, environmental, and social. However, the nascent discourse that is emerging on sustainable artificial intelligence (AI) has predominantly focused on the environmental sustainability of…
In this paper, we examine both stability and sustainability of a network-based model of natural resource consumption. Stability is studied from a dynamical systems perspective, though we argue that sustainability is a fundamentally…
Explaining biodiversity in nature is a fundamental problem in ecology. An outstanding challenge is embodied in the so-called Competitive Exclusion Principle: two species competing for one limiting resource cannot coexist at constant…
Naturalness is an extra-empirical quality that aims to assess plausibility of a theory. Finetuning measures are often deputized to quantify the task. However, knowing statistical distributions on parameters appears necessary. Such…
The sustainable biodiversity associated with a specific ecological niche as a function of land area is analysed computationally by considering the interaction of ant societies over a collection of islands. A power law relationship between…