Finance and Financial Management Commons^™

Exchange-Traded Funds: The Unknown Investment Opportunity, Thomas K. Leisher

Undergraduate Economic Review

Actively managed mutual funds are some of the most invested in investment vehicles in the modern era. However, it is a great misunderstanding of their performance relative to their passively managed exchange-traded funds. Actively managed mutual funds fail to outperform their respective benchmarks due to a variety of reasons including market efficiency, timing, and tax consequences. These findings hold true in both the long-term and short-term for equities and fixed income funds. A self-conducted survey was also conducted in order to find the knowledge and opinions of college students on ETFs and mutual funds.

How Will I Afford It? Financial Aid And Its Impact On Higher Education: Evidence From The State Of Mississippi, Daria Herasymova

Honors Theses

The cost of higher education, in real terms, doubled in the last twenty years, increasing faster than medical costs, the consumer price index and housing. In 1987, U.S. Secretary of Education, William J. Bennett, in the New York Times article, raised the concern that financial aid has unintended consequences of enabling higher education institution to increase tuition. In this paper, through collection of data and literature review, I examine the drivers behind the rising cost of higher education and test whether the postsecondary institutions in the state of Mississippi exhibit behavior, consistent with the Bennett Hypothesis. Using fixed-effects regression model, …

An Investigation Of Personal Financial Literacy Education, James R. Penner, Joshua D. Spizman

Honors Thesis

A lack of financial literacy for many people in the United States is a prominent problem that has largely gone unaddressed, but one that can have devastating results. Currently, 43% of student loan borrowers are not making payments and 33% of American adults have $0 saved for retirement (Pascarella 2-4). These alarming statistics amid a strong economic environment highlight the negative affects a lack of financial literacy can have. Higher education at LMU is geared towards providing students an education of the whole person to enable them to become better people. This research investigates whether or not LMU prepares students …

Economic And Social Benefits Of Gender Parity In Employment And Education, Elizabeth Weathersby

Honors Theses

This thesis seeks to examine the ways in which women are disadvantaged in their participation in formal employment and participation and attainment in education relative to men across the world. Furthermore, this analysis examines the economic impacts of inequalities in education and employment at a macroeconomic level and on an individual level. Most data is compiled from various Non-Governmental Organizations that fund and orchestrate global research on gender equality. The results of this research consistently indicate that women continue to face systematic disadvantages in employment, wages, occupation, upward mobility in occupations, hours worked, entrepreneurship, burden of unpaid work, educational attainment, …

Portfolio Optimization Methods: The Mean-Variance Approach And The Bayesian Approach, Hoang Nguyen

Honors Theses

This thesis is a discussion on the mean-variance approach to portfolio optimization and an introduction of the Bayesian approach, which is designed to solve certain limitations of the classical mean-variance analysis. The primary goal of portfolio optimization is to achieve the maximum return from investment given a certain level of risk. The mean-variance approach, introduced by Harry Markowitz, sought to solve this optimization problem by analyzing the means and variances of a certain collection of stocks. However, due to its simplicity, the mean-variance approach is subject to various limitations. In this paper, we seek to solve some of these limitations …

Establishing Cryptocurrency Equilibria Through Game Theory, Carey Caginalp, Gunduz Caginalp

ESI Publications

We utilize optimization methods to determine equilibria of cryptocurrencies. A core group, the wealthy, fears the loss of assets that can be seized by a government. Volatility may be influenced by speculators. The wealthy must divide their assets between the home currency and the cryptocurrency, while the government decides the probability of seizing a fraction the assets of this group. We establish conditions for existence and uniqueness of Nash equilibria. Also examined is the separate timescale problem in which the government policy cannot be reversed, while the wealthy can adjust their allocation in reaction to the government’s designation of probability.

Esg Rating And Ownership Structure In U.S. Firms, Keondo Park

CURCE Annual Undergraduate Conference

Given the rising interest in the relationship between Environmental, Social and Governance rating (ESG) and its components, this paper investigates the relationship between insider/institutional ownership structure, ESG ratings and financial performance of the firm, using 398 companies in U.S. 2017 obtained from Bloomberg. This paper entails cross-sectional analysis of ESG rating and its components in 10 sectors (Communication, Consumer Discretionary, Consumer Staples, Energy, Financial, Health Care, Industrials, Materials, Technology, and Utilities) and Return on Asset as a matrix for financial performance. The results suggest that ESG rating and performance of the firm is positively and significantly associated, except environmental score. …

Innovation: The Determinant Of Success In Software., Oksana Pawlush

CURCE Annual Undergraduate Conference

This study examines the determinants of performance in the U.S. software sector. The emergence of the software industry has been a world changing phenomenon and created a highly competitive market and a profitable investment field. Using panel regression analysis on a sample of 730 U.S. based software firms spanning the period from 1995 to 2017, this study finds that intangible assets and staff expenses have a statistically significant positive impact on the performance of software companies, as measured by their return on assets and return on equity, respectively.

Corporate Deleveraging And Financial Flexibility, Dan Dreher

CURCE Annual Undergraduate Conference

Most firms tend to deleverage from the historical peak market-leverage (ML) ratios to near-zero ML while also insisting on growing and maintaining high cash balances. Among 424 publicly traded non United States companies that are based in developed countries that are not financial nor industrial firms with five or more years post peak ML data, the median ML at the peak is

0.369 and 0.021 at the subsequent trough. The median cash / total assets ratio rises from 0.046 to

0.080, respectively during the same period. These findings support theories in which firms deleverage from peak ML to restore ample …

Evaluating An Mlb General Manager’S Bang For Their Buck, Devin Mathura

Honors College Theses

With my passion for baseball, I decided to calculate the value of each player on an MLB active roster and determine whether they are underpaid or overpaid. I then used that information to evaluate and rank how efficient each MLB general manager utilizes their money on players. With the luxury tax becoming more of an issue for teams with high payrolls, there has been an emphasis on general managers to construct a team that will be highly competitive at a reasonably low price. In my report, I imported data that reflected the position for each player as well as their …

The Introduction Of Bitcoin Futures: An Examination Of Volatility And Potential Spillover Effects, Benjamin M. Blau, Ryan J. Whitby

Economics and Finance Faculty Publications

Theory in Stein (1987) suggests that introducing derivative contracts, such as futures, can destabilize underlying asset prices if the contracts attract enough speculative traders. This paper examines how the introduction of Bitcoin futures influences the underlying Bitcoin market. Consistent with Stein (1987), we find that that Bitcoin's volatility increases significantly during the post-introduction period. Perhaps more importantly, however, we observe significant spillover effects into related markets. For instance, in other cryptocurrencies, the increase in volatility in these markets is greater than the post-introduction increase in Bitcoin.

Failure To Launch?: Advancing The Case For Financial Literacy Interventions In Postsecondary Education, Cathleen Snyder

Dissertations, 2014-2019

For college undergraduates, the thought of managing money is often new, exciting, and terrifying in the same breath. Some students have learned well from their parental and prior academic influences, and yet others may be overwhelmed by a lack of those same resources. As postsecondary institutions endeavor to level the proverbial playing field, helping college graduates launch into meaningful, financially independent lives, it begs additional consideration on the intervention methods that might be most impactful.

This study examined a for-credit, curriculum-based intervention specific to personal finance topics. It attempted to answer several key questions: How knowledgeable are students relative to …

Small Data, Small Steps: Lessons From Assessing The Investment Studio, Jiaxin Low

Research Collection Library

Singapore Management University’s (SMU) Li Ka Shing Library was renovated in 2014. During the renovation, the Investment Studio was created within the library to house high-end financial databases such as Bloomberg and Thomson Reuters (now Refinitiv). Usage of the space was assessed using quantitative and qualitative data, comparing the first academic terms across two academic years, 2017 and 2018. The data provided evidence to support anecdotal evidence and library staff’s knowledge and observation. The assessment resulted recommendations for further action. It also provided opportunity to engage with users and stakeholders of this unique space.

The Impact Of Social Media On Reputational Risk, Samantha Claire Hamilton

Senior Honors Projects

In the era of social media, reputation is a crucial feature of business activity and can help companies attract customers and reach the economies of scale and scope that justify their investment. Reputational risk is a challenging topic. This is partly because it involves temporal perception and stock market frenzy like we saw with the first bubble, Tulipmania, and the Dotcom Bubble. These potential threats have strengthened due

to social media platforms playing a main role in these “panic-in, panic out” investing behaviors. As we see from many company crises, this reputational value can grow and then disappear in moments. …

A Comprehensive Financial Analysis Of Retail And Wholesale Food Chains, Aaron Fitzgerald Dallas Ii

Honor’s College Freeman Research Journal

This Financial Analysis Report serves as a financial instrument taking an introspective view into two dynamic companies in the retail and grocery industry. Both Kroger and Costco Wholesale have consistently managed to maintain a reputable career as two large industrial organizations. These two companies have had a magnitude of success by their way of operations in such a competitive market. First, looking at each company's history and way of operations we discovered different strategies utilized between Kroger and Costco. Kroger, a supermarket chain centralizes on effective manufacturing and processing of foods sold in their various supermarkets. They experienced a 6.35% …

Behavioral Explanations Of Investors’ Trading In Financial Markets, Mohammed Saad H Alhashim

Finance and Real Estate Dissertations - Archive

In the first essay, I examine the effect of social media sentiment on the trading behavior of individual investors. I document a positive association between sentiment and retail order imbalances (i.e., individual investors tend to buy more than they sell as they become more optimistic about stocks). The association between retail investor activity and sentiment is stronger for hard-to-value stocks (small cap, low institutional ownership, and low analyst coverage firms). Finally, the association between retail order imbalances and stock returns exists only in conjunction with investor sentiment. In the second essay, I consider the effect of firm-level sentiment extracted from …

The Performance Of Military Defense Contracted Companies After September 11th, 2001: The Case Of Politically Connected Companies, Derek J. Larsen

All Graduate Plan B and other Reports, Spring 1920 to Spring 2023

This paper examines the effect that the terrorist attacks on September 11^th, 2001 had on the stock prices of companies within the military defense industry. In addition, this paper studies the effect of the defense firms’ political engagement (through lobbying activities) and how this affected the stock price response to the terrorist attacks. Our study finds that the cumulative abnormal returns of these companies are positively significant and that companies who lobbied experienced higher returns relative to those who did not lobby.

Essays On Anomalies In Asset Pricing, Xinrui Duan

Dissertations and Theses Collection (Open Access)

In Chapter 1, we examine whether various anomalies can be driven by two common behavioral forces, namely, "subjective" sentiment (representing investors' subjective biased beliefs) and "objective" limited attention (representing investors' objective cognitive constraints). While sentiment explains well many anomalies that are more speculative on the short-leg, it fails to explain anomalies that are equally speculative on the long and short-leg, including momentum and post-earnings announcement drift. Market-wide attention shifts, proxied by number of news averaged across stocks, significantly attenuates underreaction-driven anomalies, beyond the effect of sentiment. Our findings suggest that increase in market-wide attention can temporarily reduce the cost of …

Does Turnover Matter For The Performance Of Fixed Income Etfs?, Philip A. Geleta

Financial Analyst

This paper provides empirical evidence on the relation between portfolio turnover and fund performance in the exchange traded fund market using a sample of 70 actively managed fixed income funds from 2008-2017. Based on portfolio analysis, the results show that there is a significant positive relationship between turnover and Fama and French’s (1993) five factor alpha. Further panel regression analysis, however, shows no significant relationship between turnover and performance after controlling for various fund characteristics. Overall, the results show no robust effect of turnover on the performance of fixed income ETFs.

Hedge-Fund-Like Strategies For Retail Investors: Alternative Mutual Funds Vs. Alternative Etfs, Joseph De Santis

Financial Analyst

Hedge fund-like strategies in mutual funds and exchange-traded funds (ETFs) have grown in popularity in the recent decade. This paper examines the value alternative strategies add for retail investors by comparing the performance of alternative ETFs and alternative mutual funds. Using a set of 50 ETFs and 324 mutual funds that offer alternative strategies (such as long/short equity and market neutral from Morningstar Direct) from November 2009 – December 2017. This study finds that alternative mutual funds do not outperform alternative ETFs on a gross return or a net return basis. Several factors have a significant impact on the return …