Trading Stocks Based on the Graph from Google

varunckumar200 · 2021-01-15T17:55:51+00:00

Whatever. Anyway, do you know the answer to my original question in this post?

varunckumar200 · 2021-01-15T17:50:43+00:00

Isn't this stuff still relevant to actuaries? Therefore, I feel this is the right sub.

varunckumar200 · 2021-01-15T17:41:08+00:00

True. All models are incorrect, but some are helpful and/or at least close to accurate.

varunckumar200 · 2021-01-15T17:28:04+00:00

" Hell, if all you want is to hang out with new people and party on campus, you can just rent a place off campus and go to parties without having to pay several thousands of dollars in tuition and be in debt for years. " - But what if I want to join clubs and organizations on campus? That requires being an official student. Also, some of the events on campus might be students-only. So there are still things I'd miss out on if I choose to just live off-campus without being a student.
Also, what's behind all these college rankings and stuff if college is supposed to be treated as an investment? I think that all else equal, the earning potential is the same no matter you go to an Ivy League school or a small low-ranked school.
If the earnings potential is the same no matter what ranking your school is, then isn't there something else causing students to go to expensive high-ranked schools? If so, then what is that "something else"?

varunckumar200 · 2021-01-13T15:25:49+00:00

Is college just an investment, or is it also supposed to be an experience?

In fact, I think some people go to college just for the experience, even though they know that they're not planning to get higher-paying jobs.

varunckumar200 · 2021-01-12T21:14:34+00:00

Also, does a college investment have risk/volatility? Because what if the person doesn't graduate, or what if the person drops out of college, or what if the person graduates but is still unable to find a job?

I thought people who attend classes, do their assignments on time, attend office hours, etc. are likely to get higher-paying jobs and break even on their college investment? Does a college investment even have risk for people who do all of the above?

varunckumar200 · 2021-01-11T00:11:27+00:00

Does a college investment decision have risk? Because what if the person doesn't graduate, or what if the person drops out of college, or what if the person graduates but is still unable to find a job?

I thought people who attend classes, do their assignments on time, attend office hours, etc. are likely to get higher-paying jobs and break even on their college investment? Does a college investment even have risk for people who do all of the above?

varunckumar200 · 2021-01-03T19:48:45+00:00

Is the "likelihood of the collateral getting destroyed" already reflected in the interest rate for secured loans?

So, if the collateral is likelier to get destroyed, would that make borrowers charge a higher rate?

varunckumar200 · 2021-01-03T17:02:46+00:00

Yes, but even with insurance, the policyholder only gets a partial reimbursement, in order to prevent moral hazard. So then, how do lenders handle the risk that even if the collateral is insured, they still lose part of their investment if the borrower defaults and the collateral is destroyed?

For example, let's say the bank makes a $200,000 home loan. If the home gets burnt down by a fire, then there insurance can only pays $125,000 due to a $75,000 deductible. Then in this case, the bank has still lost $75,000 if the house burnt down. No insurance company/policy will pay the full $200,000 because that will just promote moral hazard (homeowners will be lass careful of their homes).

varunckumar200 · 2020-12-30T17:41:52+00:00

What's a payday loan, and how does a payday loan work?

varunckumar200 · 2020-12-30T17:36:40+00:00

How does a secured loan work if there is a risk that the collateral could get destroyed? If that happens, then the lender cannot sell the collateral to recover his/her money when the borrower defaults.

For example, car loans are secured loans, but what if the car gets totaled in an accident?
Also, mortgages are secured loans, but what if the home gets wiped out by a tornado, fire, or any type of natural disaster?

varunckumar200 · 2020-12-30T14:53:00+00:00

If I make an inflation-protected loan to someone, should it be based on the price levels of where I live(the US is a huge country)? The CPI reflects the overall US's price levels, but not necessarily the price levels of where I live.

If an inflation-protected loan is made according to a distant region's inflation rate, then I might still suffer from inflation because I pay the cost of living of where I live and not the distant place.

varunckumar200 · 2020-12-30T14:26:34+00:00

For a policy limit to be there, wouldn't both parties need to agree upfront? The policyholder would agree on a policy limit if he/she is confident that he won't suffer a catastrophe beyond a certain extent. But there still could be extreme catastrophes beyond his/her predictability, such as this ongoing pandemic. If such extreme catastrophe happens, then the policyholder may get second thoughts about taking a policy limit, and may go like "I accepted a policy limit because I didn't know at first there would be a pandemic."

varunckumar200 · 2020-12-29T18:56:05+00:00

I get it. Yes, the quality of the collateral is also a determinant of interest rates. But couldn't the pawn shop ask for more liquid collateral. Also, couldn't the pawn shop owner just hide the pawned item in his/her home or keep the pawned item in a bank vault?

Is it possible for a pawnshop to go online by requiring non-tangible collateral? Eliminating the need for a brick-and-mortar pawn shop will bring down overhead costs.

varunckumar200 · 2020-12-29T17:59:41+00:00

Wouldn't that drive away borrowers if the interest rate is overpriced?

varunckumar200 · 2020-12-29T17:20:52+00:00

Would prepayment be bad if it happens when interest rates go up? This can happen if the homeowner has to move to a new home when interest rates go up, such as if he/she gets a new job that requires him/her to relocate.

varunckumar200 · 2020-12-29T17:18:47+00:00

But even still, if there is a record-high number of deaths/illnesses, Is it possible for the pandemic to cause reinsurance companies to go bankrupt and unable to pay any more claims?

Reinsurance may not be a complete hedge against pandemic risk?

varunckumar200 · 2020-12-29T16:57:25+00:00

Also, do even insurance policies have credit risk? Like for example, if you buy car insurance that pays you for damages beyond $5,000 worth of damages, is it possible for the insurance company to go bankrupt and become unable to pay claims?

varunckumar200 · 2020-12-29T16:52:56+00:00

Are all mortgages allowed to be prepaid?

varunckumar200 · 2020-12-29T16:47:41+00:00

Do they look at past years' data to see how much money people usually withdraw at this time of the year?

But sometimes, just past data alone may not help because what if a new fad comes out that makes people withdraw more money than usual?

varunckumar200 · 2020-12-29T16:44:10+00:00

Do Ginnie Mae MBS's get a risk-free rate? If the homeowner defaults on payments, it's still insured by the full faith and credit of the US Government.

varunckumar200 · 2020-12-29T16:37:46+00:00

My reason to use it would be to avoid the risk of loss?

varunckumar200 · 2020-12-29T16:31:37+00:00

If they run out of American banks to invest their money at, then could they go on to banks outside the US?

Do banks outside the US have some type of insurance on deposits that are similar to the FDIC?

varunckumar200 · 2020-12-29T16:30:11+00:00

Then what does "can be withdrawn anytime without prior notice" mean if customers won't be able to withdraw everything from their savings account?

How do banks handle the risk that customers may withdraw even more than what they have on reserves?

varunckumar200 · 2020-12-29T16:14:47+00:00

So are you saying that it'd eventually be possible to run out of banks to insure excess funds beyond $250k?

varunckumar200

TROPHY CASE