Finance and Financial Management Commons^™

Pre-Mentoring Training On Financial Literacy For Small Business Owners, Marwa Abduljawad

Instructional Design Capstones Collection

Small business owners are continuously faced with challenges to grow their business. These challenges are not only related to market conditions, some of them are associated with the business owner's lack of knowledge or skills; thus, many of them seek mentoring opportunities. This project explores the knowledge gap between the mentor and mentee, with a focus on financial literacy and how it impacts mentoring outcomes. A needs assessment was done to assess this performance problem through interviewing project SME’s, surveying stakeholders, and literature review. Based on the findings, a self-paced micro eLearning was proposed with an instructional goal of the …

Finding A Financial Planner, Emily G. Brown Jd

Pension Action Center Publications

This fact sheet provides information on how to find the right financial planner to help you meet your retirement planning goals. This fact sheet suggests things to consider prior to picking a financial planner and answers questions like:

• What do financial planners do?
• How do you know if you need a financial planner?
• How do you find the right financial planner?
• What type of professional title does a financial planner have?

Hardship Withdrawals And Loans: Some Words Of Caution, Emily G. Brown Jd, Jeanne Medeiros Jd, Ellen Bruce Jd

Pension Action Center Publications

As defined benefit pension plans become more and more rare, the responsibility of saving for retirement falls increasingly on individuals. Many studies have been published about the average or median balances in retirement savings accounts and virtually all of them have reached the same conclusion - most Americans aren’t saving enough money to last them through their retirement years.

In this fact sheet we will take a look at one of the factors that contributes to this problem, that is, the availability of loans and hardship withdrawals from 401(k) retirement accounts, which can lead to lower account balances overall. Sometimes, …

Getting The Most Out Of Your 401(K), Emily G. Brown Jd, Jeanne Medeiros Jd

Pension Action Center Publications

Planning for your retirement is an active and ongoing endeavor. It requires a certain amount of diligence and knowledge to ensure you have an adequate amount of financial stability at retirement. In order to safeguard your economic security, it is important to know if you are getting the most out of your 401(k) retirement savings account. This factsheet provides basic information about enrolling in a 401(k) retirement savings account and important items to keep in mind once you are enrolled.

Understanding The Differences Between Defined Benefit Pension And Defined Contribution, Emily G. Brown Jd, Jeanne Medeiros Jd

Pension Action Center Publications

In recent years, more and more employers are offering employees defined contribution plans instead of defined benefit plans. Although, there has been a shift away from the defined benefit pension plan, it is important for employees to understand the difference and value of both pension plans.

Each type of pension plan has both advantages and disadvantages. What may appear as an advantage to one person might seem to be a disadvantage to another person. For example, a person who spends all or most of her career with a single employer will have very different concerns from someone who changes jobs …

Understanding The Specialized Language Of Retirement Plans, Emily G. Brown Jd, Jeanne Medeiros Jd

Pension Action Center Publications

Whether you are a participant in a defined benefit plan or a defined contribution plan, the realm of pension benefits can be tricky and confusing to navigate. Some of the terminology used might be unfamiliar to the average person. This glossary of common terms associated with retirement plans is meant to serve as a helpful resource for plan participants.

Regional Infrastructure Department Implementation Plan: Prepared For The Towns Of Wenham And Hamilton, Massachusetts And The Hamilton-Wenham Regional School District, Edward J. Collins, Jr. Center For Public Management, University Of Massachusetts Boston

Edward J. Collins Center for Public Management Publications

The purpose of this Organizational Assessment is to: a) quantify the resources needed to establish a new regional public works department; b) assess whether those resources are available or could be made available; c) prepare a recommendation of those functions to be merged; and d) make recommendations on an organizational structure and governance process.

Putting Retirement At Risk: Has Financial Risk Exposure Grown More Quickly For Older Households Than Younger Ones?, Christian Weller, Sara Bernardo

Gerontology Institute Publications

Financial markets have been characterized by boom and bust cycles since the 1980s, while the responsibility for managing retirement wealth has increasingly shifted onto individual households at the same time. Policymakers and experts have expressed concern over rising risk exposure among older households, who appear to be increasingly exposed to the growing financial risks just as they near retirement. We consider household data from the Federal Reserve’s Survey of Consumer Finances from 1989 to 2010 to analyze the correlation between age and risk exposure. We test if older households’ risk exposure has indeed grown over time, if it has increased …

Would Women Leaders Have Prevented The Global Financial Crisis? Teaching Critical Thinking By Questioning A Question, Julie A. Nelson

Economics Faculty Publication Series

Would having more women in leadership have prevented the financial crisis? This question, raised in the popular media, can make effective fodder for teaching critical thinking within courses such as gender and economics, money and financial institutions, pluralist economics, or behavioural economics. While the question, as posed, demands an answer of 'Yes - sex differences in traits are important' or 'No - gender is irrelevant', students can be encouraged to question the question itself. The first part of this essay briefly reviews literature on the sameness-versus-difference debate, noting that the belief in exaggerated behavioural differences between men and women is …

Credit Gap In Small Businesses: Some New Evidence, Atreya Chakraborty

Accounting and Finance Faculty Publication Series

What is the magnitude of credit constraint affecting small businesses? This paper provides estimate of the credit gap – defined as the difference between the desired and actual levels of debt for credit constrained small businesses. The estimated credit gap is approximately 20 percent, i.e., credit constrained small business on the average would desire 20 percent more debt. This credit gap varies considerably across industries, with manufacturing firms facing a significantly larger gap than firms in the wholesale or service industries.

The Importance Of Being Known: Relationship Banking And Credit Limits, Atreya Chakraborty

Accounting and Finance Faculty Publication Series

This paper measures the importance of bank-firm relationships in obtaining higher credit “limits.” We use data from a relatively unused section of the National Survey of Small Business Finance (NSSBF, 1993) on credit limits, credit sources, and contract terms for firms with lines of credit from multiple banks. This lets us isolate the credit limit that each bank provides the same firm, eliminating the need to control for often immeasurable, unreliable, or firm-specific “soft” information. For a median Line of Credit (LOC) of $250,000, we find that a bank with a five-year information advantage provides a LOC limit that is …

Misi At A Glimpse: January 1 To December 31, 2010, College Of Management, University Of Massachusetts Boston

Financial Services Forum Publications

According to the Index, investors were generally cautious in 2010 (approximately half the trading days); however, investor sentiment ranged from highly risk-averse to highly risk seeking, with scores distributed almost evenly across all the categories. Investor sentiment had peaked in February, reached a low in the end of May. It was on an upward trajectory towards the end of the year, and was almost near its February high.

Mass Business Report, College Of Management, University Of Massachusetts Boston

Financial Services Forum Publications

Welcome to the College of Management, UMass Boston, Financial Services Forum’s Spring 2010 report on the Massachusetts economy. The spotlight of this report is the Finance, Insurance and Real Estate (FIRE) sector in Massachusetts.

Managing Exchange Rates, Arindam Bandopadhyaya, Giorgio Gotti, Qian Lu

Financial Services Forum Publications

The collapse of the fixed exchange rate system established under the Bretton Woods Agreement ushered in fluctuating exchange rate regimes. Although extreme volatility is managed by monetary authorities, fluctuations in exchange rates present unique challenges to the manager of a multinational corporation (MNC). This chapter reviews various types of exchange rate regimes and discusses the types of risk an MNC faces due to exchange rate fluctuations. Special attention is paid to how these risks are measured and ways in which they are hedged using available financial market instruments. The chapter also discusses exchange rate forecasting models that are frequently used.

The Impact Of Macroeconomic Uncertainty On Firms Changes In Financial Leverage, Atreya Chakraborty

Accounting and Finance Faculty Publication Series

We investigate the relationship between a firm’s measures of corporate gov- ernance, macroeconomic uncertainty and changes in leverage. Recent research highlights the role of governance in financing decisions. Previous research also indicates that macroeconomic uncertainty affects a firm’s ability to borrow. In this paper we investigate how both these channels of influence affects firms’ financing decisions. Our findings show that macroeconomic uncertainty has an important role to play, both by itself and in interaction with a measure of corporate governance.

Mass Business Report, College Of Management, University Of Massachusetts Boston

Financial Services Forum Publications

Welcome to the College of Management, UMASS – Boston, Financial Services Forum’s Fall 2009 report on the Massachusetts economy. The Forum is a source of current information and commentary about critical issues facing the industries in Boston and at the national level, as well as the health of financial services in general.

The State Of New England: Economic Slowdown And Recovery After The Dotcom Bust, Arindam Bandopadhyaya, College Of Management, University Of Massachusetts Boston

Financial Services Forum Publications

What follows is an analysis of the key macroeconomic trends in the six New England states. Using data publicly available in 2007, we examine trends in GDP growth, population, personal income and unemployment rate in each state. We provide a breakdown of each state by GDP category and provide an overall weighting by super sectors.

Measures Of Investor Sentiment: Who Wins The Horse Race?, Arindam Bandopadhyaya

Financial Services Forum Publications

Traditional research on asset pricing has focused on firm-specific and economywide factors that affect asset prices. Recently, the finance literature has turned to noneconomic factors such as investor sentiment as possible determinants of asset prices. Some researchers (e.g., Eichengreen and Mody, 1998) suggest that a change in one set of asset prices may change investor sentiment, thus triggering changes in a seemingly unrelated set of asset prices, especially in the short run, giving rise to pure contagion. Fisher and Statman (2000) and Baker and Wurgler (2006) have also recognized that investor sentiment may be an important component of the market …

A Survey Of Demographics And Performance In The Hedge Fund Industry, Arindam Bandopadhyaya, James L. Grant

Financial Services Forum Publications

We investigate hedge fund demographics using data from the Alternative Asset Center (AAC) and then hedge fund performance over the twelve years since inception of the Credit Suisse/Tremont Hedge Fund Indices (HFI, 1994-2005). We find that hedge funds are largely domiciled “offshore” while hedge-fund managers are located primarily in the United States, particularly New York, California, Illinois, Connecticut and Florida. We find that the annualized performance of hedge funds as an “asset class” is about the same as that of U.S. equities (S&P 500). That being said, the real benefit of hedge funds lies in risk management as the volatility …

The Hedge Fund Explosion: Is The Bang Worth The Buck?, Arindam Bandopadhyaya, James L. Grant

College of Management Working Papers and Reports

Any casual following of the financial news would reveal that hedge funds have experienced phenomenal growth, especially over the last fifteen years. In terms of numbers, there were an estimated 8000 hedge funds in 2005, up from only 500 in 1990. During this fifteen-year period assets under management have grown from an estimated $50 billion to $1.5 trillion. Moreover, the hedgefund industry has spawned a “fund of funds” business, which has slowly become the preferred way of investing in hedge funds, especially for institutional investors. Today, the number of these combination funds is estimated at about 4000.

Until recently, hedge …

Estimating The Required Return In A World Of Heightened Uncertainty: Emphasizing The Equity Risk Premium, James L. Grant, James A. Albate, Chris Rowberry

Financial Services Forum Publications

Heightened uncertainty over the past five years--due to the bursting of the NASDAQ bubble, the recession of 2001, the September 11th attacks, accounting scandals, and the oil shocks of 2005--has brought new challenges for securities analysts and portfolio managers. This observation is particularly relevant for fundamental equity managers using price relative and/or discounted cash flow (DCF) models. While correctly worrying about values of cash flow input (dividends, free cash flow, economic earnings) to DCF models, portfolio managers must be especially aware of risk factors that impact the required return or discount rate, and relatedly, market valuation multiples. This discount rate …

The Sarbanes-Oxley Act Of 2002 And Its Effects On American Business, Lara Bergen

Financial Services Forum Publications

In the wake of the 2001-2002 Arthur Andersen accounting scandal and collapse of Enron and WorldCom, the government, the investors and the American public demanded corporate reforms to prevent similar future occurrences. Viewed to be largely a result of failed or poor governance, insufficient disclosure practices, and a lack of satisfactory internal controls, in 2002 Congress passed the Sarbanes-Oxley Act seeking to set standards and guarantee the accuracy of financial reports.

The Sarbanes-Oxley Act (known as SARBOX or SOX) sought to address these concerns through making executives responsible for company accounting statements, redefining the relationships between corporations and their auditors, …

Measuring Investor Sentiment In Equity Markets, Arindam Bandopadhyaya, Anne Leah Jones

Financial Services Forum Publications

Recently, investor sentiment has become the focus of many studies on asset pricing. Research has demonstrated that changes in investor sentiment may trigger changes in asset prices, and that investor sentiment may be an important component of the market pricing process. Some authors suggest that shifts in investor sentiment may in some instances better explain short-term movement in asset prices than any other set of fundamental factors. In this paper we develop an Equity Market Sentiment Index from publicly available data, and we then demonstrate how this measure can be used in a stock market setting by studying the price …

U. S. Competitiveness In The Global Financial Services Industry, Lawrence G. Franko

Financial Services Forum Publications

The World Trade Center Towers: they were the headquarters of Morgan Stanley, one of the world’s leading investment banks, and of Cantor Fitzgerald, the world’s leading trader of U.S. government bonds. They were also the work location of 9,000 Merrill Lynch employees. The Citicorp Building. The Prudential Tower. The New York Stock Exchange. These actual and recently uncovered potential terrorist targets in the United States are financial services companies and organizations. Add to them the threats to the World Bank and the International Monetary Fund, and one could conclude that seven out of ten terrorists prefer financial services.

This focus …

Risk Sharing And The Market For Corporate Control: A Case For Golden Parachutes, Atreya Chakraborty

Accounting and Finance Faculty Publication Series

The predictability of security returns has received considerable attention in the literature, and yet the predictability of bond returns beyond the US markets has remained far less explored. Here we plan to remedy the shortcoming, and in that effort we analyse the ability of several predetermined information variables in predicting bond returns in the European market. We test if variables, commonly used for that matter in the context of other markets (such as inverse relative wealth, term spread, real bond yield and a January dummy) are also useful predictors of European bond returns. Due to some particularities of the sample …

Down But Not Out: The Future Of The Financial Services Industry, Arindam Bandopadhyaya, Miranda Detzler, Mohsin Habib

Financial Services Forum Publications

The financial services industry is a key sector of the U.S. economy. It is a noteworthy contributor to the overall gross domestic product and is an important component of the gross state product for many states. With the downturn in the economy at the beginning of this decade and the accompanying declines in stock market values, the industry has been hit hard. Asset management firms have experienced sharp decreases in their assets under management; banks and insurance companies have had to refocus their operations and have become increasingly vulnerable to acquisition. As evidence grows stronger that it is unlikely that …

Future Issues Facing Boston: The Assessing Department, Janet L. Hunkel

John M. McCormack Graduate School of Policy and Global Studies Publications

Taxpayers' opinions of municipal government often focus on the property tax. Taxpayers are stingy, and they are critical as to whether their money is purchasing competent services. For citizens to have faith that government is democratic, taxes must be equitable — everyone must pay their fair share. For government to function efficiently, tax administration must be efficient in order to support city services.

The property tax is a complex, difficult tax to administer; it is vulnerable to misuse. However, there have been recent, dramatic changes to the tax laws. Municipal government in Massachusetts now has the political and legal wherewithall …

Future Issues Facing Boston: Financing Of The City's Operating And Capital Construction Program, J. Chester Johnson

John M. McCormack Graduate School of Policy and Global Studies Publications

This paper reviews the important factors affecting the current status of debt finance and debt management by the City of Boston, including the City's significant credit problems and the financing implications. While significant challenges to Boston's finance and debt management have recently been met in part through a combination of fiscal austerity measures and altered operating and financing approaches, there are important new debt financing challenges facing Boston in 1984 and beyond.

Boston's Fiscal Future: Prognosis And Policy Options For 1984 To 1986, Joseph S. Slavet, Raymond G. Torto

John M. McCormack Graduate School of Policy and Global Studies Publications

The finances of the City of Boston have been variously affected throughout its long history by regional and national economic cycles, by legal constraints and changes in the state-local tax system and by inter-municipal resource and expenditure disparities.

In more recent years, however, a series of tremors converged to propel Boston's seemingly chronic fiscal problem to the crisis stage. As inflation climbed to unprecedented double-digit levels, an overwhelming majority of the state's populace supported specific limits on property taxes, the primary source of municipal revenue. As a result, Boston was forced to reduce property tax levies by $144 million during …