Discount factor


Also found in: Dictionary, Thesaurus, Medical, Legal, Acronyms, Encyclopedia, Wikipedia.

Discount factor

Present value of $1 received at a stated future date.
Mentioned in ?
References in periodicals archive ?
Intuitively, a high value of v represents an economy in which most of the consumers share similar values of discount factor that are close to [[beta].
The certainty-equivalent rate will fall as the time period increases because the discount factors for higher rates fall more quickly with time and the lowest rate has more relative effect.
Similar to the above case, the discount factor [delta] is set to 0.
BEKR (2011) find that a peso event reflects high values of the stochastic discount factor in the peso state rather than very large negative payoffs to the unhedged carry trade in that state.
To avoid having to calculate each discount factor, refer to any present value table that can be found online (for free) or in the back of any finance textbook.
We consider bidders to be "impatient" if the discount factor falls below the critical discount factor.
The estimation procedure is based on some arbitrary functional form linking the discount factor to the explanatory variables.
The answer is no if the representative consumer's preferences are usual ones assumed by macroeconomists--for example, time-separable logarithmic preferences with discount factor [beta] [member of] (0, 1).
Assuming that firms have the same discount factor, [delta] [member of] (0, 1), a firm's defection incentive (DI) is given by
Since applications with unequal discount factors [4, 5] are relatively rare and it is unclear how to solve them with model-free methods, we will only consider MDPs with several criteria each based on its own reward function, but using a common discount factor [gamma].
Higher, more uncertain interest rates imply a lower discount factor and hence lower equities prices.
A further advantage is that should you die within the seven years the investment will be reduced by a discount factor for IHT purposes.