Finance and Financial Management Commons^™

2012 Q4 Market Pulse Report, John K. Paglia

Pepperdine Market Pulse Report

The quarterly IBBA and M&A Source Market Pulse Survey was created to gain an accurate understanding of the market conditions for businesses being sold in Main Street (values $0-$2MM) and the lower middle market (values $2MM -$50MM). The national survey was conducted with the intent of providing a valuable resource to business owners and their advisors. The IBBA and M&A Source present the Market Pulse Survey with the support of the Pepperdine Private Capital Markets Project and the Graziado School of Business and Management at Pepperdine University.

Critique Of Microcredit As A Development Model, Grace Levin

Pursuit - The Journal of Undergraduate Research at The University of Tennessee

The field of microcredit (otherwise known as microfinance, microlending, or microcapital) has expanded rapidly since the 1980s as an economic means of lifting people out of poverty. Generally, microcredit has been accepted as an effective method for empowering both individuals and communities. In recent years, however, critics have brought to light some of the problems associated with microlending, such as the complex socioeconomic factors that can cause loan programs to fail. These problems stem from the basic tenet of microfinance: the need for lending programs to be managed locally in order to understand the needs of a community and assess …

Financial Services Innovation: Local Strategy, Management, And Change – A Field Investigation, Ann-Catherine Nave

Pursuit - The Journal of Undergraduate Research at The University of Tennessee

This study examines the innovation sources and processes of regional financial services firms through inductive field research. Innovation in these firms, and presumably other financial services firms and other smaller organizations, originate primarily out of three sources, the drive for efficiency, the external environment, and strategic, ambidextrous management. Successfully innovative firms balance the short-term need for efficiency improvements with the long-term desire to grow primarily through visionary, yet adaptive, leadership.

An Appraisal Of Al-Ijarah Al-Mawsufah Fi Al-Dhimmah (Forward Ijarah) From Fiqh Perspective, Abu Talib Mohammad Monawer, Akhtarzaite Abd Aziz

Abu Talib Mohammad Monawer

Al-Ijarah Al-Mawsufah Fi Al-Dhimmah (Forward Ijarah) is a new form of transactions introduced to the Islamic banking industry which has original ground in the classical books of Islamic Jurisprudence. Most of the classical scholars discussed it with particularized ijarah in parallel without any separation of chapters or headings unlike al-Bahuti and al-Minhaji. The scholars of four schools of Islamic Law are unanimously agreed on the legality of forward ijarah albeit some contemporary scholars mention the early dispute in this regard and attribute prohibition of forward ijarah to Hanafi School. This attribution is not accurate as it is proved by their …

Two Essays On Investment, Yao Zheng

University of New Orleans Theses and Dissertations

This dissertation consists of two essays: one looks at the time-varying relationship between earnings and price momentum, and the other looks at how liquidity and transparency affect the pricing differential between Chinese A-and Hong Kong H-share.

The first essay presented in Chapter I investigates the time varying relationship between earnings momentum and price momentum. Using a Markov-switching framework, allowing for variation between high volatility and low volatility states, I find that price momentum is significantly more influenced by earnings momentum in the high volatility state. Further for price momentum I find that loser firms display a higher degree of differential …

Impact Of Psychological Factors On Investment Decision Making Mediating By Risk Perception: A Conceptual Study, Lubna Riaz, Ahmed Imran Hunjra, Rauf I. Azam

Ahmed Imran Hunjra (PhD)

Every individual is different from others due to various factors which include demographic factors, age, race and sex, education level, social and economic background; same is the situation with the investors. The most critical challenge faced by them is the investment decision; they act in a rational manner and usually follow their instincts and emotional biases while making investment decisions. The investigation of previous studies reveals the importance of various psychological factors which affect their investment decision. Keeping this in view, a study model has been developed to describe the impact of risk propensity, asymmetric information and problem framing on …

Using Pairs Of Criteria To Obtain Superior Stock Portfolio Performance, Abdullah Aai Yousuf

Explorations – The Journal of Undergraduate Research, Scholarship and Creativity at Wright State

This paper discusses the use of pair of financial criteria to obtain the superior stock portfolio performance. Several Portfolios are created with different number of securities over different time horizons, using pair of financial criteria and Price momentum strategy. Our results give support for the use of pairs of criteria in selecting and managing equity portfolio. The synergy effect of combining a financial ratio with the price momentum obtains both statistical and economical superior performance results; especially the pair of Earnings to Price ratio along with Price Momentum strategy with smaller of number of securities in short run.

Low Volatility Etfs, Steven D. Dolvin

All Chapters

A recent trend is the development of low volatility funds, including both ETFs and mutual. These funds invest in a subset of a specified index, selecting only those stocks with low price volatility (which may be identified by a low beta). There is not sufficient history to gauge the performance of such funds, but two issues are worth noting. First, given the impact of volatility on compounded returns (i.e., geometric averages are lower than arithmetic averages), low volatility funds should have an advantage, particularly in otherwise volatile markets. Second, value funds may outperform over long periods (albeit not every period), …

Analysis Of The Impact Of Contagion Flow On Firm Value And Application To High Yield Bond Portfolio Optimization, Wendy Ann-Swenson Roth

Doctoral Dissertations

Portfolios of financial instruments are designed to increase returns and manage risk. In high-risk investment strategies, central measures of risk must be complemented with controls on tail measures of risk. An unanticipated event that impacts securities of one firm can contagiously effect those of other firms through a contagion flow process that may occur via a set of network connections. Such connections among firms arise due to a variety of factors, such as a shared supply chain member or auditing firm. These connections spread the contagion, potentially impacting numerous other firms in the network. This can adversely affect the level …

Liquidity In The 144a Debt Market, Karen Ann Craig

Doctoral Dissertations

This dissertation presents my research analyzing the liquidity component of corporate bond spreads for bonds issued privately under Rule 144A during the period 2003 – 2011. Rule 144A bonds are limited to trading among qualified institutional investors and therefore are inherently less liquid than registered corporate bonds. I assess an amendment to Rule 144 modifying the restrictions on public resale of Rule 144A bonds intended to increase the liquidity of 144A bonds and decrease the cost of capital to firms issuing these securities. This amendment provides an ideal exogenous shock to evaluate 144A bonds. Assessing the liquidity premiums and yield …

Re-Opening A Dan’S Pet Supply Store In Hemet, California, Jeffrey Z. Harrison

Agribusiness

Abstract

The purpose of this study was to determine if Dan’s Feed & Seed should re-open a pet supply store in the town of Hemet, California. The goal was to satisfy three objectives including if Dan’s Feed & Seed could compete in the current market, if there was a demand in Hemet, California, and if Dan’s could be profitable within a two year period. Dan’s proved to be able to compete with the competition by having lower prices with two out of three competitors and could compete with the remaining competitor by providing high quality, name brand dog food that …

The Compatibility Of National Culture In International Mergers And Acquisitions, Chaoyun Liu

Senior Honors Theses

This paper examines the relationship between national culture differences and five-day cumulative abnormal returns of acquirers around cross-border merger announcements. The sample consists of 1,200 cross-border deals by frequent acquirers from emerging countries for the period of January 1, 1985 to June 30, 2008. The main objective is to analyze the relation between the difference in Hofstede (1984)’s four cultural dimensions --- power distance, individualism, masculinity, and uncertainty avoidance and the merger performance. The results imply the compatibility of some cultural dimensions, individualism in particular, that result in gains in merger. The results also show that the cultural effects vary …

How You Estimate The Yield Curve Matters!, Luiz Paulo Fichtner, Pedro Santa-Clara

Luiz Paulo Fichtner

We evaluate a two-factor Cox et al. (1985a,b) model using Euribor zero-coupon yields. We estimate this model using a state-space framework, where we sum a log-likelihood function of the state vector dynamics to a log-likelihood function of cross-section pricing errors. We introduce a likelihood-scaling weight in the joint log-likelihood function and show that there is a tradeoff in how one estimates a yield curve. Giving more weight to the cross-section of pricing errors improves the fitting and forecasting of Euribor yields, while giving more weight to the log-likelihood function of the state vector dynamics improves interest rate derivative pricing at …

Out-Of-Sample Predictability Of Bond Returns, Luiz Paulo Fichtner, Pedro Santa-Clara

Luiz Paulo Fichtner

We test the out-of-sample predictive power for one-year bond excess returns for a vari- ety of models that have been proposed in the literature. We find that these models perform well in sample, but have worse out-of-sample performance than the historical sample mean. We write the one-year excess return on a n-maturity bond at time t + 1 as the difference between n times the n-maturity bond yield at time t, and the sum of n − 1 times the (n − 1)-maturity bond yield at time t + 1 and the one-year bond yield at time t. Instead of …

Do Financial Advisors Have Consumers' Best Interests? Not Always, But Trust Is Key, Say Experts, Singapore Management University

Perspectives@SMU

In a world of volatile markets and complex financial products, getting financial advice from professional financial planners and advisers might seem like a good idea for those for those trying to meet their financial goals. However, finding good, impartial and suitable advice might be akin to finding a needle in the proverbial haystack.

Policy Options For Microlender Funding In Arkansas, Harvard Law School Mississippi Delta Project

Delta Directions: Publications

Very small businesses, otherwise known as “microenterprises,” play vital roles in the local, state, and national economies. As engines of employment, entrepreneurship, and innovation, microenterprises can be highly successful vehicles for inclusive and robust economic growth. However, many such businesses are constrained by lack of access to credit. Microenterprise owners and entrepreneurs may lack the credit or operating history needed to obtain a traditional small business loan at a commercially viable rate of interest, or the loan amount requested may be too small for a traditional lender to consider. Undoubtedly, a great many entrepreneurial opportunities are lost for lack of …

Mississippi Kids Count: Financial Literacy Education In Mississippi, Terrance Garrett, Mark Holden

Delta Directions: Publications

This report concerns child financial literacy education in Mississippi. Lack of financial literacy can be viewed as a root cause of many of the problems that individuals and families face in Mississippi, particularly in the state’s poor and rural areas, including the proliferation of both subprime mortgages and payday lending. As this report discusses, one of the best ways to develop financially literate and capable citizens is to educate children in the basics of personal finance. Individuals that lack basic financial knowledge and skills are at a disadvantage in navigating the modern economy and are vulnerable to being taken advantage …

Special Purpose Acquisition Companies

Fordham Business Student Research Journal

Special purpose acquisition companies (SPACs) are blank-check companies that raise funds from investors through a public offering of shares and warrants (known as a Unit IPO) for the purpose of buying a private firm. SPACs have no assets or business plan and their only intent is to acquire an operational business. Because of limited data (SPACs have only gained popularity in the past decade), there has been very little research into the nature of firms that are targeted for SPAC acquisitions, with most research focusing on short-term performance statistics. A SPAC transaction effectively takes an existing private business and makes …

Do Shareholders Penalize Bank Boards And Management For The Financial Crisis?

Fordham Business Student Research Journal

The 2007-2008 financial crisis was a pervasive shock that profoundly impacted the financial services industry. Often described as the worst economic crisis since the Great Depression, this event provides a unique opportunity to examine the consequences experienced by members of boards of directors and top management at bank holding companies for what shareholders may perceive as failures in oversight and excessive risk-taking. This study examines whether shareholders penalized top management at banks and provides some new evidence of the crisis’s impact on management careers. Using the 36 largest American bank holding corporations by assets as a sample, we examine director …

Underwriting Syndicates In Bric Countries: Determinants Of Syndicate Size And Member Selection

Fordham Business Student Research Journal

The process of startup firms raising capital through equity markets by issuing shares to the public is a strong sign of financial growth and innovation. Going public requires the issuing firm to share information with potential investors and requires financial institutions to underwrite the effort, typically through a syndicate. The underwriting syndicate is a coalition of competing banks that serve as intermediaries between the firm and the investors. In emerging nations, this process is compounded by the differences in the maturity of the financial markets and the economic environment. The growth and significance of capital markets in the BRIC (Brazil, …

Convenience In The Mutual Fund Industry, George D. Cashman

Finance Faculty Research and Publications

Abstract

I examine the role of convenience in the mutual fund industry. I find that investors pay more for relatively convenient funds, and that the flows to convenient funds are less responsive to performance. These findings suggest that investors do not evaluate mutual funds independently, but rather that investors select a primary fund, likely based on beliefs about managerial ability, and then select funds which are relatively convenient to this primary fund.

Highlights

► I find that investors pay a significant premium to invest in convenient mutual funds. ► I find that the flows to convenient funds are indifferent to …

The Archway Investment Fund Semi Annual Report, Fall 2012, Bryant University, Archway Investment Fund

Archway Investment Fund

No abstract provided.

Going Overboard? On Busy Directors And Firm Value, George D. Cashman, Stuart L. Gillan, Chulhee Jun

Finance Faculty Research and Publications

Abstract

The literature disagrees on the link between so-called busy boards (where many independent directors hold multiple board seats) and firm performance. Some argue that busyness certifies a director’s ability and that such directors are value enhancing. Others argue that “over-boarded” directors are ineffective and detract from firm value. We find evidence that (1) the disparate results in prior work stem from differences in both sample composition and empirical design, (2) on balance the results suggest a negative association between board busyness and firm performance, and (3) the inclusion of firm fixed effects dramatically affects the conclusions drawn from, and …

Do Banks Monitor Corporate Decisions? Evidence From Bank Financing Of Mergers & Acquisitions, Sheng Huang, Anand Srinivasan, Ruichang Lu

Research Collection Lee Kong Chian School Of Business

We examine whether banks, in providing financing for the deals, monitor firms mergers and acquisitions to the extent that will benefit acquirers shareholders. Inconsistent with the conventional theoretical argument, we do not find that bank- financed deals are associated with better stock or accounting performance than bond- financed deals or deals paid with internal cash. There is strong evidence instead that banks tighten up the loan contract terms in financing the deals, such as cutting short the loan maturity and imposing higher collateral requirement and more covenant restrictions. However, bank-financed deals are more likely to be terminated when they experience …

Do U.S. Firms Fly Higher When Bypassing The U.S. Capital Markets? An Investigation Of The Short- And Long-Run Performance Of Foreign Ipos?, Robert N. Killins

Theses and Dissertations - UTB/UTPA

This dissertation studies the performance of U.S. firms that partake in a foreign IPO – bypassing their domestic exchanges and raising their equity in a foreign market. Chapter one provides an introduction and brief review of the main research questions and results. Chapter 2 provides a detailed literature review on initial public offerings-IPOs. This includes relevant studies on the long- and short-run performance of IPOs, theories for IPO underpricing and an international component of the IPO literature. Additional cross-listing literature is also reviewed to provide a more complete and balanced understanding of the international market for equity. Chapter 3 develops …

Do Banks Monitor Corporate Decisions? Evidence From Bank Financing Of Mergers & Acquisitions, Sheng Huang, Anand Srinivasan, Ruichang Lu

Research Collection Lee Kong Chian School Of Business

We examine whether banks, in providing nancing for the deals, monitor rms mergers and acquisitions to the extent that will bene t acquirers shareholders. Incon- sistent with the conventional theoretical argument, we do not nd that bank- nanced deals are associated with better stock or accounting performance than bond- nanced deals or deals paid with internal cash. There is strong evidence instead that banks tighten up the loan contract terms in nancing the deals, such as cutting short the loan maturity and imposing higher collateral requirement and more covenant restrictions. However, bank- nanced deals are more likely to be terminated …

Intraday Price Discovery In Emerging Equity Market: Analysis Of Set50 Index, Set 50 Index Futures And Thaidex Set50 (Tdex), Chiraphol New Chiyachantana, Julaluck Choochuay, Tanakorn Likitapiwat

Research Collection Lee Kong Chian School Of Business

This study employs Vector Error Correction Model (VECM), information share and conditional information share methods to investigate price discovery in SET50 Index (cash index), SET50 Index Futures (futures index) and ThaiDex SET50 (exchange traded fund). Our findings indicate that there exists a long run relationship among three markets and a multi-market trading of derivatives markets and its underlying asset helps improve price efficiency. With respect to the degree of price formation process, SET50 Index Futures contributes most in price discovery process, followed by SET50 Index and ThaiDex SET50.

The Effectiveness Of Trading Halts And Investor Trading Performance, Nareerat Taechapiroontong, Charlie Charoenwong, Chiyachantana N. Chiraphol, Radchda Lurang

Research Collection Lee Kong Chian School Of Business

This paper examines the effectiveness of trading halts and the trading performance of different types of investors or traders during halts in an Asian emerging equity market. We use trade-by-trade data flagged by types of traders between January 1999 and December 2007. The results suggest that trading halts improve the efficiency of the market by reducing the information asymmetry and stabilizing the market. Trading halts serve as devices to facilitate a price discovery process by giving investors opportunity to adjust their trading interests and reaction to the material information. Our findings show that return and volatility tend to revert to …

Knowledge-Driven Autonomous Commodity Trading Advisor, Yee Pin Lim, Shih-Fen Cheng

Research Collection School Of Computing and Information Systems

The myth that financial trading is an art has been mostly destroyed in the recent decade due to the proliferation of algorithmic trading. In equity markets, algorithmic trading has already bypass human traders in terms of traded volume. This trend seems to be irreversible, and other asset classes are also quickly becoming dominated by the machine traders. However, for asset that requires deeper understanding of physicality, like the trading of commodities, human traders still have significant edge over machines. The primary advantage of human traders in such market is the qualitative expert knowledge that requires traders to consider not just …

Political Influence And Tarp Investments In Credit Unions, Elisabeta Pana, Linus Wilson

Elisabeta Pana

About 48 credit unions received capital injections as part of the financial sector bailout. The predicted probability of receiving bailout funds jumps from 29% to 81% for the typical credit union, if the institution's headquarters was in the district of a member of the U. S. House Financial Services Committee (HFS). The credit unions receiving funds were significantly less likely to lend, contrary to the goals of the program. These results indicate that political influence may be an important determinant of which institutions receive taxpayer funds.