All posts by jgarven

More on Bitcoin specifically and cryptocurrencies generally…

For more information concerning Bitcoin (other than the Motley Fool articles that I posted a few minutes ago), I recommend reading the Wikipedia article at Technically, Bitcoin is an “application” of so-called “Blockchain” technology. Of course, I wish that I would have had the foresight to have purchased (for that matter, even “mined”) Bitcoin starting back in 2009, but such is the nature of uncertainty – what may seem  “obvious” now seemed borderline silly back then.

The level of volatility in Bitcoin spot and futures prices can be quite breathtaking at times.  Indeed, daily volatility of Bitcoin is roughly ten times the daily volatility of the SP 500 stock index (see WSJ Daily Shot, 11-January-2018). While there may be some entertainment value in buying and selling cryptocurrencies in the spot and futures markets, these instruments are clearly not suitable for most  investors.

For more on Blockchain, I recommend watching either NYU finance professor David Yermack (cf. or Duke finance professor Cam Harvey (cf. – they are the best of the best finance experts on this topic.

Updating of the Finance 4366 Course Schedule to Accommodate today’s “Icepocalypse”

Since Baylor University is closed today as a result of today’s “Icepocalypse”, I have updated the Spring 2018 Finance 4366 Course Schedule accordingly. The net effect of today’s class cancellation is that the schedule for the remainder of the semester has been shifted forward; consequently, Problem Set 1 is now due on Thursday, January 18 (instead of today), and the two midterm exams will now take place on Thursday, February 15 and Tuesday, April 3 (instead of 2/13 and 3/29). Thursday’s class will begin with a quiz based upon the assigned readings for our statistics tutorial. The readings, problem sets, and lecture notes pages have also been updated to reflect the fact that Finance 4366 is now officially scheduled to meet 29 rather than 30 times during the Spring 2018 semester.

Problem Set 1 hint…

Problem Set 1 is due at the beginning of class on Tuesday, January 16. Here is a hint for solving the 4th question on problem set 1.

The objective is to determine how big a hospital must be so that the cost per patient-day is minimized. We are not interested in minimizing total cost; if this were the case, there would be no hospital because marginal costs are positive, which implies that total cost is positively related to the number of patient-days.

The cost equation C = 4,700,000 + 0.00013X2 tells you the total cost as a function of the number of patient-days. This is why you are asked in part “a” of the 4th question to derive a formula for the relationship between cost per patient-day and the number of patient days. Once you have that equation, then that is what you minimize, and you’ll be able to answer the question concerning optimal hospital size.

Extra Credit Opportunity

I have decided to offer the following extra credit opportunity for Finance 4366. You can earn extra credit by attending and reporting on Dr. Richard Vedder’s upcoming lecture entitled “Can Markets Improve College Education and Make it More Affordable”:

Thursday, January 18
Foster 250 @ 4:00 pm
Richard Vedder: Distinguished Professor of Economics at Ohio University // Adjunct Scholar at American Enterprise Institute
Talk Title: “Can Markets Improve College Education and Make it More Affordable”

If you decide to take advantage of this opportunity, I will use the grade you earn to replace your lowest quiz grade in Finance 4366 (assuming that your grade on the extra credit is higher than your lowest quiz grade).  The report should be in the form of a 1-2 page executive summary in which you provide a critical analysis of Dr. Vedder’s lecture.  In order to receive credit, the report must be submitted via email to in either Word or PDF formats by no later than Monday, January 22 at 5 p.m.

Fewer Listed Companies: Is That Good or Bad for Stock Markets?

 Today’s WSJ provides an interesting historical perspective of the cumulative effects of the dot-com bust, implementation of Sarbanes-Oxley, M&A activity, share buybacks, and growth of private equity on the number of listed shares in US stock markets during the course of the past couple of decades. Also see for an academic perspective of the so-called “U.S. listing gap”, which is apparently due to a decrease in new listings coupled with an increase in delistings over this period.
As the Dow Jones Industrial Average broke through 25000 and other stock market indexes continue rising to new highs, the number of publicly traded U.S. companies keeps shrinking.

Khan Academy “Finance and capital markets” videos

Not only are the Khan Academy Calculus and Statistics videos that I referenced in a previous posting quite useful; I am also a big fan of the Khan Academy “Finance and capital markets” videos which are located at; these videos do a great job of effectively presenting many of the most important concepts which are typically covered in undergraduate and MBA level finance curricula (indeed, the content provided by the “Options, swaps, futures, MBSs, CDOs, and other derivatives” subsection of the “Finance and capital markets” page effectively subsumes most of the Finance 4366 course content!