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Pot odds are only useful if a player has enough equity.Equity is the chance a player has to win the hand at showdown.It is calculated as the fraction of remaining cards in the deck for each remaining street (sequential card being dealt, e.g. turn, river) that can give a player the winning hand.
The first half of the formula can be estimated based on reads on opponents or their previous actions. The second part is the equity obtained when the opponent(s) fold to your raise (i.e. the total current pot), minus the equity resulting in case your opponent(s) call your raise (i.e. your showdown equity in the post-raise pot).
SPM is derived from the compound interest formula via the present value of a perpetuity equation. The derivation requires the additional variables and , where is a company's retained earnings, and is a company's rate of return on equity. The following relationships are used in the derivation:
It's getting increasingly difficult to find returns in the market as stock and bond prices fall simultaneously. The tandem sell-off is a relatively new dynamic. Until the past few weeks, stocks ...
The current yield is the ratio of the annual interest (coupon) payment and the bond's market price. [ 4 ] [ 5 ] The yield to maturity is an estimate of the total rate of return anticipated to be earned by an investor who buys a bond at a given market price, holds it to maturity , and receives all interest payments and the payment of par value ...
Robert Shiller's plot of the S&P 500 price–earnings ratio (P/E) versus long-term Treasury yields (1871–2012), from Irrational Exuberance. [1]The P/E ratio is the inverse of the E/P ratio, and from 1921 to 1928 and 1987 to 2000, supports the Fed model (i.e. P/E ratio moves inversely to the treasury yield), however, for all other periods, the relationship of the Fed model fails; [2] [3] even ...
An interest rate model could be added and would lead to a portfolio containing bonds of different maturities. Some authors have added a stochastic volatility model of stock market returns. Bankruptcy can be incorporated. This problem was solved by Karatzas, Lehoczky, Sethi and Shreve in 1986. [12]
Yield to put (YTP): same as yield to call, but when the bond holder has the option to sell the bond back to the issuer at a fixed price on specified date. Yield to worst (YTW): when a bond is callable, puttable, exchangeable, or has other features, the yield to worst is the lowest yield of yield to maturity, yield to call, yield to put, and others.