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| Novak, Frank S.; Schnitkey, Gary D.. |
| This article evaluates the effects of including the costs of bankruptcy in a dynamic model of off-farm investment decisions using a stochastic dynamic programming (SDP) model which incorporates the stochastic dynamic nature of investment returns and the interrelationships between financial structure and investment decisions. Our results suggest that in the presence of bankruptcy, optimal investment decisions are affected by financial structure and financial market conditions. Ignoring bankruptcy costs in determining investment decisions results in a high probability of bankruptcy. |
| Tipo: Journal Article |
Palavras-chave: Financial Economics. |
| Ano: 1994 |
URL: http://purl.umn.edu/30752 |
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| Jeffrey, Scott R.; Novak, Frank S.. |
| This paper examines alternative risk management strategies in terms of their effectiveness for three representative Alberta farm operations. Stochastic dynamic simulation methods are used to model financial performance for these farms, and alternative risk management programs are compared in terms of their ability to stabilize returns, support income and reduce the probability of bankruptcy. The results suggest that government programs such as the Net Income Stabilization Account (NISA) program or the Farm Income Disaster Program (FIDP) in Alberta have some benefits in terms of supporting income levels and reducing the chances of farm failure. Neither program is very effective, however, in stabilizing year to year income or cash flow for the farm... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Farm Management; Risk and Uncertainty. |
| Ano: 1999 |
URL: http://purl.umn.edu/24118 |
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| Novak, Frank S.; Viney, Bruce. |
| This study evaluates the risk and returns to cattle feeding in Alberta from the application of alternative marketing and pricing strategies. Feedlot finishing of 650 pound calves and 800 pound yearlings is modeled over the years from 1980 to 1993. The results of the study are based on the domestic and US marketing of live cattle using traditional cash marketing, futures contracts, put options, and forward production contracting systems. Use of the Western Domestic Feed Barley contract is also simulated. The results showed that barley price changes produced relatively small return changes compared to feeder and fat cattle price changes. An important source of return risk was found to be basis risk. Production contracting strategies which eliminated basis... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Demand and Price Analysis; Marketing. |
| Ano: 1995 |
URL: http://purl.umn.edu/24044 |
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