Andrew Kalotay Volume 12, Number 1, First Quarter 2014 We explore the effect of taxes on the prices of municipal bonds. Although interest is tax-exempt, the gain resulting from purchasing a muni at a deep discount below the so-called de minimis threshold is subject to severe tax treatment. The gain is taxed as ordinary income… Read more
2014
Sovereign Wealth and Risk Management: A Framework for Optimal Asset Allocation of Sovereign Wealth
Zvi Bodie and Marie Briere Volume 12, Number 1, First Quarter 2014 This paper sets out an analytical framework for optimal asset allocation of sovereign wealth, based on the theory of contingent claims analysis applied to the sovereigns economic balance sheet. A country solves an asset-liability management problem involving its sources of income and its… Read more
The Performance of Leveraged and Inverse Leveraged Exchange Traded Funds
Brian J. Henderson and Gerald W. Buetow Volume 12, Number 1, First Quarter 2014 We document significant abnormal daily returns to leveraged and inverse leveraged exchange-traded funds (ETFs). Abnormal returns are positive for leveraged funds and negative to inverse leveraged funds, and the magnitude increases in the absolute value of the leverage multiple. We propose… Read more
INSIGHTS: Norway’s Summit on Responsible Investing
Mitch Towner Volume 12, Number 1, First Quarter 2014 This is a summary of the issues discussed at the 2013 Investment Strategy Summit of the Norwegian Government Pension Fund Global. The emphasis of the summit was responsible investing with a special emphasis on ways to strengthen the Funds work on responsible investment. The summit brought… Read more
INSIGHTS: Stakeholders Perspectives on Norwegian Investment Responsibility
Sarah Takaki Volume 12, Number 1, First Quarter 2014 The Strategy Council for Norway’s Government Pension Fund Global, supported by the Norwegian Ministry of Finance, hosted the Responsible Investment Conference held in Oslo on 20 June 2013. The conferences goal was to facilitate dialogue with stakeholders on environmental, social, and governance (ESG) issues to inform… Read more
CASE STUDIES: New Financing Methods in the Biopharma Industry: A Case Study of Royalty Pharma, Inc.
Andrew W. Lo and Sourya V. Naraharisetti Volume 12, Number 1, First Quarter 2014 The biotechnology and pharmaceutical industries are facing significant challenges to their existing business models because of expiring drug patents, declining risk tolerance of venture capitalists and other investors, and increasing complexity in translational medicine. In response to these challenges, new alternative… Read more