Deutsche Geschichte: Neuere Zeit

The nature of capital and income

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Multivolume work

Identifikator:: 1892063557

Document type:: Multivolume work

Author:: Lamprecht, Karl http://d-nb.info/gnd/118569015

Title:: Deutsche Geschichte

Place of publication:: Berlin

Publisher:: Gaertner

Year of publication:: 1891-

Collection:: Economics Books

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Volume

Identifikator:: 1892067412

URN:: urn:nbn:de:zbw-retromon-237426

Document type:: Volume

Author:: Lamprecht, Karl http://d-nb.info/gnd/118569015

Title:: Neuere Zeit

Volume count:: Abt. 2

Place of publication:: Freiburg im Breisgau

Publisher:: Heyfelder

Year of publication:: 1905

Scope:: XV, 396 S.

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Multivolume work

Structure type:: Chapter

Title:: Zwanzigstes Buch

Collection:: Economics Books

Skc. 3] THE RISK ELEMENT 271 probable cases and that only one of these will give double sixes. Mathematics could not obtain the result unaided by experience. All that mathematics accomplished with the dice was to derive a result from the assumed con- ditions of two sets of six equal chances. Whether these assumed conditions existed was a question, not of mathe- matics, but of concrete opinion. If the dice were known to be “loaded,” the case would be materially altered. §3 Tn order to apply this theory of chance to the valuation of capital, we observe that both the future rate of interest and the future items of income are uncertain. In the prob- lem of capital-valuation, however, the uncertainty in the rate of interest does not always enter, for only present and not future rates are employed at the time at which the valuation of the capital is made. When we call a rate a “ present” rate we mean, of course, that the contract or estimate to which it relates is a present contract or estimate. The very fact of valuation implies a known rate or rates at which the valuer is contrasting present and future goods. There may be several “ present ” rates. Thus if the “ present” be the year 1906, we may imagine a whole series of rates of interest holding true in 1906 for such a man; for instance, 4 per cent for a 1-year contract, 6 per cent for a 5-year contract, and 5 per cent for a 15- year contract, all originating at the present moment. All of these rates are fixed and known and hold true in the year 1906, but they do not determine the rates which will hold true for the contracts or estimates of 1907 or 1914. In valuing capital, therefore, it is not necessary to regard the rate of interest as uncertain except when the rate in question is a future rate. Let us suppose that in due at the end of the time FA Figure 10 the income AB is , and that the rate of interest

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