What is the difference between ex-ante and ex post?
Ex-post is another word for actual returns and is Latin for “after the fact.” The use of historical returns has customarily been the most well-known approach to forecast the probability of incurring a loss on investment on any given day. Ex-post is the opposite of ex-ante, which means “before the event.”
Does ex-ante efficiency imply ex post efficiency?
An ex ante efficient allocation is always interim and ex post efficient, and an interim efficient allocation is always ex post efficient.
What is ex-ante forecast?
An ex-ante forecast is a forecast that only uses the information (i.e. the value of economic variables) which is available at the time of the actual forecast and not the value of some variables available for the forecasting horizon.
How is ex-ante risk calculated?
Ex ante variance calculation: The expected return is subtracted from the return within each state of nature; this difference is then squared. Each squared difference is multiplied by the probability of the state of nature. These weighted squared terms are then summed together.
Is ex post facto legal?
A law that makes illegal an act that was legal when committed, increases the penalties for an infraction after it has been committed, or changes the rules of evidence to make conviction easier. The Constitution prohibits the making of ex post facto law. (See ex post facto (see also ex post facto).)
Why is one considered to be ex post and the other ex-ante?
When transcribed from Latin, ex-ante is the prediction of a particular event in the future, such as the potential returns. On the other hand, ex-post means “after the event,” while ex-ante means “before the event.” Ex-post is backward-looking, and it looks at results after they have already occurred.
Is Pareto efficiency possible?
Pure Pareto efficiency exists only in theory, though the economy can move toward Pareto efficiency. Alternative criteria for economic efficiency based on Pareto efficiency are often used to make economic policy, as it is very difficult to make any change that will not make any one individual worse off.
Why is one considered to be ex-post and the other ex-ante?
What is the difference between the ex-ante and the ex-post real interest rate?
While the ex-post real rate is simply the difference between the nominal interest rate and actual inflation, the ex-ante real rate is defined as the difference between the nominal rate and the expected inflation rate.
What is mean by ex-ante investment?
Ex-ante investment refers to the desired investment or planned investment during the period of one year. This is the investment expenditure which is intended to be made in the economy during the period of one year.
What is the ex-ante interest rate?
Ex-ante interest rate is the real interest rate that is calculated before the actual rate of inflation. The inflation rate during the loan period is only known after the loan’s been paid, which is referred to as the ex-post real interest on the loan.
What is ex post facto law in simple terms?
Overview. Ex post facto is most typically used to refer to a criminal statute that punishes actions retroactively, thereby criminalizing conduct that was legal when originally performed.
What does ex ante mean in financial markets?
Ex-ante analysis in financial markets refers to prediction of various indicators, economic and financial, by evaluating past and present data and parameters. Ex-ante analysis is not always correct…
Why is ex-ante analysis not always correct?
Ex-ante analysis is not always correct because it is often impossible to account for variables and markets are also susceptible to shocks that affect all stocks. “Ex-ante” essentially involves any type of prediction ahead of an event, or before market participants become aware of the pertinent facts.
Which is an example of an ex-ante event?
Ex-ante refers to future events, such as the potential returns of a particular security, or the returns of a company. Much of the analysis conducted in the markets is ex-ante, focusing on the impacts of long-term cash flows, earnings and revenue.
Who is James Chen and what is ex ante?
James Chen, CMT, is the former director of investing and trading content at Investopedia. He is an expert trader, investment adviser, and global market strategist. What is Ex-Ante? Ex-ante refers to future events, such as the potential returns of a particular security, or the returns of a company.