--- title: (Un)Calculated Risk | by Peter Orr of Intuitive Analytics | Financial Decisions | Intuitive Analytics description: Financial Decisions | by Peter Orr of Intuitive Analytics --- # (Un)Calculated Risk | by Peter Orr of Intuitive Analytics ## [MSRB: On MA exam, what is “Forfeited Option Value” in a Refunding?](https://www.intuitive-analytics.com/blog/msrb-on-ma-exam-what-is-forfeited-option-value-in-a-refunding) Posted by Peter Orr on Jun 06, 2015 [![](https://www.intuitive-analytics.com/hubfs/msrb_question.png) ](https://www.intuitive-analytics.com/blog/msrb-on-ma-exam-what-is-forfeited-option-value-in-a-refunding) > “Any measurement you make, without knowledge of its uncertainty, is completely meaningless.” > > - Prof. Walter Lewin, MIT Physics 101 [Read More](https://www.intuitive-analytics.com/blog/msrb-on-ma-exam-what-is-forfeited-option-value-in-a-refunding) Topics: [Financial Decisions](https://www.intuitive-analytics.com/blog/topic/financial-decisions), [refunding](https://www.intuitive-analytics.com/blog/topic/refunding), [call option](https://www.intuitive-analytics.com/blog/topic/call-option), [bond option](https://www.intuitive-analytics.com/blog/topic/bond-option), [callable bonds](https://www.intuitive-analytics.com/blog/topic/callable-bonds), [refundings](https://www.intuitive-analytics.com/blog/topic/refundings) ## [New Headline: Muni Issuers Make Outstanding Speculators](https://www.intuitive-analytics.com/blog/new-headline-muni-issuers-make-outstanding-speculators) Posted by Peter Orr on Apr 18, 2015 [![](https://www.intuitive-analytics.com/hubfs/calculated_risk_pic.png) ](https://www.intuitive-analytics.com/blog/new-headline-muni-issuers-make-outstanding-speculators) > The path is smooth that leadeth on to danger. > > – William Shakespeare [Read More](https://www.intuitive-analytics.com/blog/new-headline-muni-issuers-make-outstanding-speculators) Topics: [Financial Decisions](https://www.intuitive-analytics.com/blog/topic/financial-decisions), [decision support](https://www.intuitive-analytics.com/blog/topic/decision-support), [swaps](https://www.intuitive-analytics.com/blog/topic/swaps), [municipal swaps](https://www.intuitive-analytics.com/blog/topic/municipal-swaps), [variable rate bonds](https://www.intuitive-analytics.com/blog/topic/variable-rate-bonds) ## [The Right Analysis for Refundings – MSRB, Take Note](https://www.intuitive-analytics.com/blog/bid/77536/The-Right-Analysis-for-Refundings-MSRB-Take-Note) Posted by Peter Orr on Jan 29, 2015 [![](https://www.intuitive-analytics.com/hs-fs/file-2610809046-png/images/biz_peep_at_whiteboard.png) ](https://www.intuitive-analytics.com/blog/bid/77536/The-Right-Analysis-for-Refundings-MSRB-Take-Note) We see a lot of confusion in public finance as to how to analyze refundings. Unfortunately I think much of it stems from people *outside* of public finance coming in without a complete understanding of the environment in which a tax-exempt issuer operates i.e. the muni market. These interlopers get excited when they see option specifications in an official statement, then cry out, “We’ve seen these before. We have fantastic models used everywhere else, they must apply here too!” Unfortunately the foundational assumptions underpinning these models do not exist in the muni market leading this statement to be bunk (technical term my father used to use…). In fact those elegant bond options models do not apply in the muni flea market. [Read More](https://www.intuitive-analytics.com/blog/bid/77536/The-Right-Analysis-for-Refundings-MSRB-Take-Note) Topics: [Financial Engineers](https://www.intuitive-analytics.com/blog/topic/financial-engineers), [Financial Decisions](https://www.intuitive-analytics.com/blog/topic/financial-decisions), [refunding](https://www.intuitive-analytics.com/blog/topic/refunding), [advance refunding](https://www.intuitive-analytics.com/blog/topic/advance-refunding), [refunding efficiency](https://www.intuitive-analytics.com/blog/topic/refunding-efficiency), [call option](https://www.intuitive-analytics.com/blog/topic/call-option), [bond option](https://www.intuitive-analytics.com/blog/topic/bond-option) ## [Muni Call Options: Information vs Price](https://www.intuitive-analytics.com/blog/bid/59862/Muni-Call-Options-Information-vs-Price) Posted by Peter Orr on Jun 05, 2013 [![](https://www.intuitive-analytics.com/hs-fs/file-58787086-png/images/price_value_girl.png) ](https://www.intuitive-analytics.com/blog/bid/59862/Muni-Call-Options-Information-vs-Price) *Today on (Un)Calculated Risk we welcome Shaun Rai, a Managing Director at Montague DeRose and Associates, as our guest contributor (and another outstanding IA client!). * [Read More](https://www.intuitive-analytics.com/blog/bid/59862/Muni-Call-Options-Information-vs-Price) Topics: [financial model](https://www.intuitive-analytics.com/blog/topic/financial-model), [financial forecasting](https://www.intuitive-analytics.com/blog/topic/financial-forecasting), [Financial Decisions](https://www.intuitive-analytics.com/blog/topic/financial-decisions), [risk in finance](https://www.intuitive-analytics.com/blog/topic/risk-in-finance), [decision support](https://www.intuitive-analytics.com/blog/topic/decision-support), [call option](https://www.intuitive-analytics.com/blog/topic/call-option), [bond option](https://www.intuitive-analytics.com/blog/topic/bond-option) ## [50 Years of UST Yields - How Well do Forwards Predict?](https://www.intuitive-analytics.com/blog/bid/59605/50-Years-of-UST-Yields-How-Well-do-Forwards-Predict) Posted by Peter Orr on May 17, 2013 [![](https://www.intuitive-analytics.com/hs-fs/file-34956540-png/images/ust_10y_yields-resized-600.png) ](https://www.intuitive-analytics.com/blog/bid/59605/50-Years-of-UST-Yields-How-Well-do-Forwards-Predict) "Despite its role in...finance, the expectations hypothesis (EH) of the term structure of interest rates has received virtually no empirical support." - [Predictions of Short-Term Rates and the Expectations Hypothesis](https://www.intuitive-analytics.com/blog/topic/research.stlouisfed.org/wp/2010/2010-013.pdf‎), Federal Reserve Bank of St. Louis [Read More](https://www.intuitive-analytics.com/blog/bid/59605/50-Years-of-UST-Yields-How-Well-do-Forwards-Predict) Topics: [Financial Models](https://www.intuitive-analytics.com/blog/topic/financial-models), [interest rate model](https://www.intuitive-analytics.com/blog/topic/interest-rate-model), [financial forecasting](https://www.intuitive-analytics.com/blog/topic/financial-forecasting), [Financial Decisions](https://www.intuitive-analytics.com/blog/topic/financial-decisions) ## [1 thing to know - Bettors, Bookies, and Tax-exempt Debt Managers](https://www.intuitive-analytics.com/blog/bid/59484/1-thing-to-know-Bettors-Bookies-and-Tax-exempt-Debt-Managers) Posted by Peter Orr on May 09, 2013 [![](https://www.intuitive-analytics.com/hs-fs/file-34472159-png/images/betting_pic2.png) ](https://www.intuitive-analytics.com/blog/bid/59484/1-thing-to-know-Bettors-Bookies-and-Tax-exempt-Debt-Managers) "Horse sense is the thing a horse has which keeps it from betting on people" - [W.C. Fields](http://www.wcfields.com/)  [Read More](https://www.intuitive-analytics.com/blog/bid/59484/1-thing-to-know-Bettors-Bookies-and-Tax-exempt-Debt-Managers) Topics: [interest rate model](https://www.intuitive-analytics.com/blog/topic/interest-rate-model), [financial forecasting](https://www.intuitive-analytics.com/blog/topic/financial-forecasting), [Financial Decisions](https://www.intuitive-analytics.com/blog/topic/financial-decisions), [Risk Management](https://www.intuitive-analytics.com/blog/topic/risk-management), [probability](https://www.intuitive-analytics.com/blog/topic/probability) ## [Is the Treasury Really Going Long?](https://www.intuitive-analytics.com/blog/bid/57566/Is-the-Treasury-Really-Going-Long) Posted by Win Smith on Feb 14, 2013 [![](https://www.intuitive-analytics.com/hs-fs/file-20113201-png/images/picture1.png) ](https://www.intuitive-analytics.com/blog/bid/57566/Is-the-Treasury-Really-Going-Long) *We are honored this week to have a guest post from Win Smith, author of the [The Well-Tempered Spreadsheet](http://welltemperedspreadsheet.wordpress.com/).  Win is the president of [Win Analytics LLC](http://www.winanalytics.com/Win_Analytics_LLC/Welcome.html), an independent research and advisory firm.* [Read More](https://www.intuitive-analytics.com/blog/bid/57566/Is-the-Treasury-Really-Going-Long) Topics: [Financial Decisions](https://www.intuitive-analytics.com/blog/topic/financial-decisions), [debt structuring](https://www.intuitive-analytics.com/blog/topic/debt-structuring), [Treasury Debt](https://www.intuitive-analytics.com/blog/topic/treasury-debt), [Weighted Average Life](https://www.intuitive-analytics.com/blog/topic/weighted-average-life), [Win Smith](https://www.intuitive-analytics.com/blog/topic/win-smith) ## [The RIGHT refunding discount rates to use? Wrong question...](https://www.intuitive-analytics.com/blog/bid/54944/The-RIGHT-refunding-discount-rates-to-use-Wrong-question) Posted by Peter Orr on Aug 14, 2012 [![](https://www.intuitive-analytics.com/hs-fs/file-15746261-jpg/images/quest_mark_small.jpg) ](https://www.intuitive-analytics.com/blog/bid/54944/The-RIGHT-refunding-discount-rates-to-use-Wrong-question)  I finally know what distinguishes man from the other beasts: financial worries. - [Jules Renard](http://en.wikipedia.org/wiki/Jules_Renard) [Read More](https://www.intuitive-analytics.com/blog/bid/54944/The-RIGHT-refunding-discount-rates-to-use-Wrong-question) Topics: [Financial Decisions](https://www.intuitive-analytics.com/blog/topic/financial-decisions), [public finance](https://www.intuitive-analytics.com/blog/topic/public-finance), [refunding](https://www.intuitive-analytics.com/blog/topic/refunding), [advance refunding](https://www.intuitive-analytics.com/blog/topic/advance-refunding), [decision support](https://www.intuitive-analytics.com/blog/topic/decision-support), [pv savings](https://www.intuitive-analytics.com/blog/topic/pv-savings) ## [The ‘Formula that Killed Wall Street?’ or ‘Know A Bad Rate Model When You See It’](https://www.intuitive-analytics.com/blog/bid/54011/The-Formula-that-Killed-Wall-Street-or-Know-A-Bad-Rate-Model-When-You-See-It) Posted by Peter Orr on Jun 19, 2012 [![](https://www.intuitive-analytics.com/hs-fs/file-15750621-png/images/straight_line_rate_model.png) ](https://www.intuitive-analytics.com/blog/bid/54011/The-Formula-that-Killed-Wall-Street-or-Know-A-Bad-Rate-Model-When-You-See-It) "Copulas are generally an early doodling activity in an area." - Anonymous Street quant [Read More](https://www.intuitive-analytics.com/blog/bid/54011/The-Formula-that-Killed-Wall-Street-or-Know-A-Bad-Rate-Model-When-You-See-It) Topics: [Financial Models](https://www.intuitive-analytics.com/blog/topic/financial-models), [interest rate model](https://www.intuitive-analytics.com/blog/topic/interest-rate-model), [financial model](https://www.intuitive-analytics.com/blog/topic/financial-model), [financial economy](https://www.intuitive-analytics.com/blog/topic/financial-economy), [Financial Decisions](https://www.intuitive-analytics.com/blog/topic/financial-decisions), [public finance](https://www.intuitive-analytics.com/blog/topic/public-finance), [public finance software](https://www.intuitive-analytics.com/blog/topic/public-finance-software), [financial risk](https://www.intuitive-analytics.com/blog/topic/financial-risk), [public finance analytics](https://www.intuitive-analytics.com/blog/topic/public-finance-analytics) ## [The Flaw of Averages, Muni Style: SIFMA/LIBOR and Rates](https://www.intuitive-analytics.com/blog/bid/27321/The-Flaw-of-Averages-Muni-Style-SIFMA-LIBOR-and-Rates) Posted by Peter Orr on Jul 28, 2010 Here’s a quick quiz. If over the last 10 years 1M LIBOR reset weekly averaged 2.814%, and the average of SIFMA / 1M LIBOR was 82.0%, what was the [SIFMA](http://www.sifma.net/swapdata.html) average over the same time period (all rates unadjusted for day counts, holidays etc.)? 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