Management Sciences and Quantitative Methods Commons^™

Optimal Strategy For Gambling Pools, Aaron C. Brown

International Conference on Gambling & Risk Taking

In gambling pools, entrants submit predictions and the prizes are awarded to the prediction or predictions closest to actual outcomes. Some well-known examples are football pools (both the global and American game versions), toto, NCAA March Madness bracket pools and horse racing tournaments. For small pools with complete information about outcome probabilities, exact game theory optimal solutions are straightforward to compute. If there is also complete information about the number and strategy of other players, optimal exploitive strategies are even easier to derive. These problems have been treated in the literature.

This paper argues that the complete information approaches are …

Portfolio Manager Compensation And Mutual Fund Performance, Linlin Ma, Yuehua Tang, Juan-Pedro Gomez

Research Collection Lee Kong Chian School Of Business

We use a novel dataset to study the relation between individual portfolio manager compensation and mutual fund performance. Managers with explicit performance-based pay exhibit superior subsequent fund performance, especially when investment advisors link pay to performance over a longer time period. In contrast, alternative compensation arrangements, such as fixed salary, assets-based pay, or advisor-profits-based pay are not associated with superior performance. Our tests further show that the positive relation between performance-based contracts and fund performance is not driven by the selection of talented managers proxied by education background. Lastly, managers with performance-based pay engage less in risk-shifting activities.

Individuals Approaching Retirement Have Options (Literally) To Secure A Comfortable Retirement, Bryan Foltice

Bryan Foltice

This article examines the critical final five-year period leading up to retirement and analyzes whether traditional asset-allocation strategies effectively and consistently assist individuals in reaching their retirement income goals as they approach retirement. These traditional strategies are evaluated against alternative, option-based investment strategies that assure a certain amount of retirement income, after adjusting for inflation, while maximizing stock participation with the remaining funds in the portfolio through the use of options. In this simulation, we find higher overall expected yields in the traditional investment strategies over the evaluated five-year period. However, after applying a constant relative risk aversion (CRRA) coefficient, …

In Equations We Trust? Formula Learning Effects On The Exponential Growth Bias, Bryan Foltice, Thomas Langer

Bryan Foltice

This paper evaluates the possible benefits and drawbacks of the formal formula learning of compound growth as it pertains to eliminating, or at least reducing, the exponential growth bias in various household savings and debt decisions. In our main experimental study, we determine if the ability to calculate the simple compound savings formula only assists in its direct area of application with an available calculator, or if this knowledge extends into similar exponentially-based savings and debt decisions when either a calculator is prohibited or when the formula is unknown. In the process of tackling this research question, we develop a …

Can Cognitive Error Explain The Ipo Partial Adjustment Phenomenon?, Steven D. Dolvin

Steven D. Dolvin

Chapter 5 of: Klein, E. (2005). Stock exchanges, IPO's and mutual funds. New York: Nova Science Publishers.

The Impact Of Board Structure On Ipo Underpricing, Steven Dolvin, Jack Kirby

Steven D. Dolvin

Prior research has examined the impact of board structure on firm performance and found that characteristics such as board size affect both operating and stock price performance. Existing research has concentrated primarily on performance in periods well removed from a firm’s initial public offering (IPO), and relatively little research has examined the impact of board structure on the stock price performance of IPOs, particularly with regard to characteristics other than board size. This study fills this gap, finding that the key board characteristic is the percentage external directors on the board. The authors find that the greater the percentage of …

In Equations We Trust? Formula Learning Effects On The Exponential Growth Bias, Bryan Foltice, Thomas Langer

Scholarship and Professional Work - Business

This paper evaluates the possible benefits and drawbacks of the formal formula learning of compound growth as it pertains to eliminating, or at least reducing, the exponential growth bias in various household savings and debt decisions. In our main experimental study, we determine if the ability to calculate the simple compound savings formula only assists in its direct area of application with an available calculator, or if this knowledge extends into similar exponentially-based savings and debt decisions when either a calculator is prohibited or when the formula is unknown. In the process of tackling this research question, we develop a …

Cultural Influnces On Risk Tolerance And Portfolio Creation, Mark K. Pyles, Yongping Li, Shifang Wu, Steven D. Dolvin

Scholarship and Professional Work - Business

We extend existing research that examines the impact of culture on risk tolerance. Using surveys completed by Chinese and American students, we find, consistent with previous studies, that Chinese students perceive themselves as more risk tolerant. However, we find that Chinese students are less consistent in matching their perceived tolerance levels with actual scores from a standard risk tolerance assessment. Further, we also examine mock portfolios created by the respondents and find no evidence that Chinese students create portfolios that are riskier than their American counterparts. Our findings suggest that differences in risk tolerance are at least partially a product …

Ceo Ownership And Firm Performance: Evidence From The 2003 Dividend Tax Cut, Hong Kim Duong

Open Access Theses & Dissertations

This study investigates whether and how CEO ownership impacts firm performance by using the large tax cut on individual dividend income enacted in 2003 (The 2003 Dividend Tax Cut) as an exogenous shock. My findings suggest that CEO ownership of dividend payers significantly increased after the shock in the form of higher annual restricted stock grants and more option exercises. I document that the change in CEO ownership has an asymmetric impact on firm performance and investment efficiency. Only dividend payers with CEOs who moved closer to optimal ownership experienced improvement in investment efficiency and performance. In contrast, dividend payers …

The Role Of Corporate Governance In Preventing Bank Failures In Zimbabwe., Bernard Chidziva

Walden Dissertations and Doctoral Studies

The 2008-2009 global financial crisis resulting in some banks collapsing has raised questions about the corporate governance of financial institutions. Some bank managers lack an understanding of the role of corporate governance in preventing bank failures. In this multiple case study, data were collected through interviews and triangulated with annual reports to explore the strategies some bank managers need to improve their understanding of the role of corporate governance in preventing bank failures in Zimbabwe. The 7 study participants were purposefully recruited from a larger population of 19 bank managers responsible for corporate governance and compliance operating in Zimbabwe between …

Relationship Between Working Capital Management, Policies, And Profitability Of Small Manufacturing Firms, Zelealem Tadesse Temtime

Walden Dissertations and Doctoral Studies

Working capital optimization, as an act of balancing liquidity and profitability, presents significant challenges when small businesses lack managerial expertise and access to affordable capital and credit facilities. To remain successful through efficient utilization of working capital, small business leaders need to understand the association between working capital management (WCM), working capital policy (WCP), and business profitability (PFT). Anchored in the cash conversion cycle theory, the purpose of this correlational study was to examine the relationship between WCM, WCP, and PFT. The study employed a retrospective secondary analysis of financial data from 2004 to 2013 from a random sample of …

Valuing Commercial Finance Companies, David Earle Coit

Walden Dissertations and Doctoral Studies

Stakeholders are increasingly insistent that companies increase firm value. The problem is that stakeholders of financial services firms are unable to accurately determine firm value. The purpose of this correlational study was to examine the accuracy of 4 valuation models in predicting the market value of equity of commercial finance companies. Study participating companies were 8 listed U.S. or Canadian commercial finance companies. The theoretical constructs of the study included the accuracy of valuation models, modern portfolio theory, and the correlation of book value of equity to market value of equity. Financial information on participating companies obtained from public filings …

Corporate Social Responsibility And Financial Performance Of Banks In The United States, Waidi Alani Gbadamosi

Walden Dissertations and Doctoral Studies

Corporate social responsibility has evolved as a business strategy, but the business worth of voluntary social conduct has not been well understood. The contradictory research findings mean that social performance is not maximized, which constrains economic growth and sustainable development. Grounded by stakeholder theory, this correlational study was aimed at examining the effect of social responsibility factors on the market-based Fama-French cost of capital. Within a sample of 71 United States banks, the publicly available ethical ratings, financial data, and stock market data were analyzed using multiple regression models. Contrary to the positive effect of social conduct on financial performance …

Multinational Corporations' Return On Investment Optimization In Nigeria's Business Environment, Funlola Francesca Fajinmi

Walden Dissertations and Doctoral Studies

Trade between the United States and Africa decreased 32% from US$125 billion, in 2011, to US$85 billion, in 2013; however, MNCs from other regions have continued to increase investments in Africa. Multinational corporations (MNCs) generate most of their return on investment (ROI) from the Western world. Globalization, increasing middle classes in emerging markets, and decreasing population in the Western world have lead to unsustainable ROI. Nigeria, the most populous and largest economy in Africa and the 27th largest economy in the world, offers new opportunities with an annual growth rate forecast of 6% to 8%. Utilizing the diamond theory of …

Nigerian Banking Governance, Leadership Style, And Performance During The 2008-2009 Financial Crisis, Adeola Oluwayemi Agbato

Walden Dissertations and Doctoral Studies

The 2008-2009 global financial crisis of financial systems negatively affected about 30% of Nigerian banks, leading to profitability issues. The profitability issues led to operational challenges, downsizing, and liquidation of some banks. The purpose of this correlational study was to examine the relationship between corporate governance structure, perception of leadership style, and bank performance. This study was grounded in agency theory and used survey and archival data. Survey data were collected from 11 participants employed by commercial banks located in Nigeria, using the Multifaceted Leadership Questionnaire. Corporate governance and bank performance data were collected from annual bank reports. The model …

Relationship Between Emotional Intelligence And Servant Leadership In Banking, Curtis J. Gregory

Walden Dissertations and Doctoral Studies

U.S.-based financial institutions have experienced significant failure rates since the mid-1980s. The problem within the U.S.-based banking industry is that the focus of leadership development has been primarily on cognitive abilities, whereas interpersonal skills, such as emotional intelligence, have been neglected. Research has focused on U.S. bank failures from a risk mitigation, economic, or legislative perspective, creating a gap in research on leadership behavior. The purpose of this correlation study was to determine whether a significant relationship exists between emotional intelligence and servant leadership among leaders in the U.S. small business banking industry. The theoretical framework compared intelligence types to …

The Role Of Strategic Leadership In Banking Profitability, Joseph Ochien'g Witts

Walden Dissertations and Doctoral Studies

A study on corporate leadership failure in America by Vugt and Ronay has shown that the failure rate of business leadership in meeting profitability targets is as high as 60%. Most organizations fail to attain profitability targets due to limited experience and exposure to strategic leadership. The aim of this single case study design was to explore the role of strategic leadership in banking profitability. Twelve purposively selected senior bankers and members of the board of directors with over 10 years of experience in banking and profitability and 3 years in the top management team participated in the study in …

Exploring Bank Managers' Strategies For Developing Millennials For Leadership Roles In Commercial Banks, Kenneth Morton

Walden Dissertations and Doctoral Studies

Understanding strategies to prepare Millennials for leadership roles in commercial banks is critical to ensure organizational stability and success and to avoid knowledge gaps and leadership deficiencies created by large numbers of retiring Baby Boomers. Guided by learning network theory and generational theory, the purpose of this multiple case study was to explore the strategies that 3 bank managers in North Carolina and South Carolina used to prepare Millennials for leadership. These 3 bank managers had a minimum of 2 years of experience leading teams of employees which included Millennials. The study included semistructured interviews to elicit detailed narratives from …

The Credibility Of Government Budget: The Case Of Sierra Leone, Patrick Saidu Conteh

Walden Dissertations and Doctoral Studies

Fiscal reports have, since 2010, documented weak budget credibility in Sierra Leone public financial management noting that the government budget does not constitute a dependable framework for the planning, allocation and efficient use of the nation's resources. The purpose of this study was to develop a budgetary reform agenda and the research question that guided the study related to the reasons for the high monetary variances between the approved budget and the year-end financial reports. Government budgets and financial reports were reviewed for 2010-2014 and senior government officials were interviewed regarding the main stages of the annual budgetary process. The …