Business Commons^™

Finance And Artificial Intelligence, Luke Schawang

Theses/Capstones/Creative Projects

The integration of artificial intelligence (AI) into finance represents a significant evolution in the industry, one that has been ongoing for years but is now accelerating rapidly. This paper explores the various forms and functions of AI, from reactive machines to the potential for superintelligence, and examines its impact on banking, business finance, and investing.

In banking, AI has bolstered cybersecurity and fraud detection, leveraging machine learning algorithms to continuously improve accuracy and efficiency. Similarly, in business finance, AI tools like chatbots and algorithms streamline processes, enhance productivity, and reduce costs. In investing, AI-driven solutions such as robo advisors offer …

An Examination Of The Determinants Of Ease Of Doing Business: Perspectives From World Economies, Omar Eldarawy

Theses and Dissertations

This thesis’ purpose is to explore the correlation between Ease of Doing Business sub-scores and the overall Ease of Doing Business score. The study includes a detailed quantitative study into the previously mentioned relationship. The Ease of Doing Business sub-scores comprise of scores representing starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency. This is conducted via a series of diagnostic tests to identify an appropriate regression model. These tests include the Hausman Test, RESET Test, and Breusch-Pagan Test. Based on the tests, …

Ai-Nvesting: An Empirical Analysis With Sector Categorization And Prompt Complexity Considerations Assessing The Predictive Power Of Chatgpt In Stock Market Forecasting, Ian J. Larson

CMC Senior Theses

Abstract

This paper investigates whether ChatGPT has any predictive power when it comes to the stock market. Since its public release in December 2022, OpenAI’s ChatGPT has become a popular tool for millions of users across the world. With new use cases being found every day, I explore whether the system has any utility at predicting where stock prices will go. Using a 10-year study window, I prompt ChatGPT to give U.S. equity picks on a one-year holding period basis, segregating its picks into 3 different category sizes across 8 directed prompts. I examine the 24 equal weight portfolios of …

The Impact Of Wars On Us Defense Stock Returns, Viksit Verma

CMC Senior Theses

This thesis examines the financial performance and market impact of defense and aerospace companies during periods of war and conflict. The study examines a sample of 9 firms representing the defense sector, and utilizes an event study methodology to assess stock returns during specific geopolitical events, namely the Russia-Ukraine War and the Israel-Hamas conflict. The study generally reveals positive abnormal returns during conflicts, indicating lower volatility and reduced market risk for the sample of defense firms compared to the broader market. All abnormal returns are statistically significant for the Russia-Ukraine War. For the Israel-Hamas conflict, abnormal returns for 4 out …

Activism Aftershocks: Looking Beyond The Short-Term Stock Surges Caused By Activist Hedge Fund Campaign Announcements, Zara Vakath

CMC Senior Theses

It is well known that firms targeted by activist hedge funds experience positive abnormal stock returns during the campaign announcement window. However, the link between these short-term returns and the impact to long-term target firm performance has not been established. In this study, I find essentially no link between the positive announcement window returns and long-term performance improvements, using a variety of different methods. I examine performance changes over time and also relative to a matched sample of firms that have not been targeted by activist hedge funds. Additionally, I assess the correlation between the magnitude of short-term abnormal stock …

Assessing The Impact Of Impact Investing: Practices, Challenges, And Opportunities Towards The Standardization Of Impact Assessment Mechanisms, Taylor Poe

Finance Undergraduate Honors Theses

This research project focuses on gathering information on which impact measurement mechanisms are currently used in the impact investing industry, and how these mechanisms are standardized across various firms, geographic locations, and fund types. The overarching goal of the study is to provide an assessment of the impact investing industry and the use of standardized impact assessment practices. The specific goal of this research study is to collect and present information on the current state of impact measurement standardization. Research is separated into three large components: interviews with industry leaders, findings from social finance conferences, and research of scholarly sources. …

Index Funds And Etfs: Simplifying Investing For Better Returns, Patrick J. Cotton

Honors Theses and Capstones

No abstract provided.

Lehman Brothers Bankruptcy: Reasons, Effects, And Outcome, Christian J. Reller

Finance Undergraduate Honors Theses

Lehman Brothers’ bankruptcy was a major turning point during the 2008 Financial Crisis, and Lehman Brothers itself has become a prime example of regulatory failure since its closing. The demise of Lehman stemmed from the repeal of the Glass-Steagall Act of 1933. The deregulation of investment banking in the 1990s forged the way for new investment practices on Wall Street. The relaxation of rules allowed investment banks to be heavily invested in volatile assets. Lehman’s issues were an extremely high leverage ratio, illiquid assets, and poor corporate governance. An extremely high leverage ratio left Lehman susceptible to large movements in …

Frameworks Used To Measure The Societal Influences & Effectiveness Of Impact Investing, Mya E. Baptiste

Senior Honors Projects, 2020-current

The purpose of this thesis is to learn how capital generates positive returns for society through impact investing. I address the different forms of impact investments along the spectrum and examples of companies that are grouped into each category. Afterward, I highlight the various pre-existing frameworks being used by the industry to properly measure their social returns and then provide insight into my personal experience working with Citigroup, Inc. Impact Fund. This paper includes an empirical study to address my hypothesis that companies who invest in producing social returns receive a positive impact on their financials. It was concluded that …

The Stock Market And Politics: An Analysis Of Stock Market Reactions To Political Decisions And World Events, Noah Endicott

Selected Honors Theses

The stock market is influenced by many outside factors around the world. Stock prices change every single day and there are many factors that cause this. This paper is structured as an extended literature review analyzing previous literature on the topic of politics and the stock market. There are six specific types of political decisions and world events analyzed to determine the effect on the stock market. The following topics are political elections, the presidential impact, tariffs, war, the pandemic, and tax cuts. Stock market data is gathered before and after the event takes place to understand the effects on …

Esg Investing: From Fad To Force, Erin Cullen

Senior Theses

ESG Investing is the application of environmental, social, and governance factors to identify material investment risks and growth opportunities. Though traditionally viewed as non-financial factors, this paper asserts that ESG factors are indeed financially material. This work first surveys the current state of ESG Investing, its shortcomings, and its success despite these inherent issues. Section II adds a new perspective to ESG research by examining the applications of ESG scores in portfolio management. The study conducts t-tests to answer whether the typical holdings of an ESG mutual fund are more sustainable than those of traditional funds. The paper then focuses …

Spac Success Factors: Determinants Of Post-Acquisition Share Price Growth, Cade Moffatt

CMC Senior Theses

This paper examines characteristics of Special Purpose Acquisition Companies (SPACs) as determinants of post-acquisition success. I collected data on all SPACs which merged with a target firm between 2016 and the start of 2021. The data set controls for a host of variables including the contractual design of the SPAC, management team characteristics, founder compensation structure, key underwriter data, and performance metrics measured throughout the SPAC’s lifecycle. Using a multivariable regression, I find new and robust insights into the SPAC market. Contrary to current literature, I conclude that the misaligned incentives caused by the initial at-risk capital supplied by founders …

Permanent Equity: Successfully Finding And Buying A Small Business, Lewis Wang

Senior Theses

This thesis aims to build off the existing research on the advantages of permanent equity within the micro-cap market space. This strategy combines many advantages from private equity, venture capital, small-cap, and value / quality investing in order to generate a differentiated return. While the pros and cons of these various strategies have been explored by previous academic research, not much has been written on the actual implementation and choices practitioners must make when they decide how to deploy capital. In order to dive deeper into implementation, this thesis presents several anecdotes of various firms that invest in this space …

Buy-And-Hold Versus Momentum Investment Strategies During Financial Crises, Howard Ly

Finance Undergraduate Honors Theses

In his article, “Where the Black Swans Hide & The 10 Best Days Myth,” Mebane Faber found that most of the best and worst trading days occur when the market is already declining. This phenomenon is due to increased volatility during bear markets, a result of investors’ emotions. Emotions, particularly fear and greed, lead to irrational trading behavior, resulting in rampant speculation or panic selling. Ideally, an investor would be in the market for the above-mentioned best days and be out of the market during the worst days. However, the difficulty in predicting these important dates have led some investors …

Understanding The Retail Investor: Technical And Fundamental Analysis, Ben Davis

Chancellor’s Honors Program Projects

No abstract provided.

Do Education, Spending Habits And Planning Habits Affect Investing Habits?, Miran Simunic

Theses

The purpose of this thesis is to explore the influence of formal education, spending habit, and planning habit on investing habit, while controlling for age, gender, income, and self-perception of financial knowledge. The previous studies tested the influence of education on certain money management skills or investing habits, but none of them explored the influence of formal education, spending habit and planning habit on investing habits. This thesis explores this influence of those three independent variables with control variables on a sample that represents the entire population of the United States. The testing is performed on the data from 2012 …

Comparing Portfolio Diversification Strategies In Different Market Environments, Kyle Tobias Koerten

Chancellor’s Honors Program Projects

No abstract provided.