Finance and Financial Management Commons^™

How Informative Is Floating Nav When Securities Trade Infrequently?, Kyle D. Allen, George D. Cashman, Drew B. Winters

Finance Faculty Research and Publications

We examine if a floating net asset value (NAV) increases the transparency of risk for investors. Using closed-income fixed income funds we find little evidence that a floating NAV helps investors better understand the value and risk of a fund when a fund's assets trade infrequently. This potentially informs the debate regarding the adoption of a floating NAV in the money market industry. Our results suggest that it is unlikely that the benefits of floating NAV will outweigh the costs.

Option Return Predictability, Jie Cao, Han Bing, Qing Tong, Xintong Zhan

Research Collection Lee Kong Chian School Of Business

We show the cross-section of equity option returns can be predicted by a variety of underlying stock characteristics and firm fundamentals, including idiosyncratic volatility, past stock returns, profitability, cash holding, new share issuance, and dispersion of analyst forecasts. Such predictability is not mechanically inherited from the stock market because these variables do not significantly predict stock returns in our sample, and our results hold for delta-hedged calls and puts in the same directions. We document new option trading strategies that are profitable even after transaction costs. These profits are robust across different market conditions and subsamples. They cannot be explained …

Bank Competition And Financial Stability: Evidence From The Financial Crisis, Brian Atkins, Lynn Li, Jeffrey Ng, Tjomme O. Rusticus

Research Collection School Of Accountancy

We examine the link between bank competition and financial stability using the recent financial crisis as the setting. We utilize variation in banking competition at the state level and find that banks facing less competition are more likely to engage in risky activities, more likely to face regulatory intervention, and more likely to fail. Focusing on the real estate market, we find that states with less competition had higher rates of mortgage approval, experienced greater housing price inflation before the crisis, and a steeper housing price decline during it. Overall, our study is consistent with greater competition increasing financial stability.

Mutual Fund Fees Continue To Fall, Steven D. Dolvin

All Chapters

Passive funds have historically outperformed active funds, and much of this difference is likely driven by the lower fees charged by passive funds. A discusses the impact on both investors and the industry.

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 …

David Bowie: Finance Genius?, Steven D. Dolvin

All Chapters

Famous musician David Bowie just passed away. While most people remember him for his music, he is also famous in the finance area. Bowie was among the first to offer an asset-backed security, which in his case was based on future royalties from his songs. In recognition, this type of asset is often referred to as a "Bowie-bond." See article here, Bloomberg.

China Suspends Circuit Breakers, Steven D. Dolvin

All Chapters

Circuit breakers are designed to slow down (or even halt) panicked selling. However, Chinese authorities recently suspended their newly implemented circuit breakers, as they seemed to be increasing panic (as opposed to reducing it). See article here, Finance Asia.

Mutual Fund Fees, Steven D. Dolvin

All Chapters

As we all know, fees impact net returns. For mutual funds, aside from any load, the two primary fees charged are management fees and 12b-1 fees. The management fees are easy to understand. The 12b-1 fees, however, are not. They are designed to cover distribution costs, but this is a broad term. In reality, much of this fee is used to pay brokers/advisors for directing client business to the funds. As a recent article (Investment News) suggests, the SEC may begin to limit such payouts.

Public Finance And Tax Equity In The Arabian Gulf Monarchies, Timothy Mathews

Journal of Global Initiatives: Policy, Pedagogy, Perspective

This study examines notions of public finance equity in the six Arabian Gulf monarchies of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. Because of unique characteristics of government expenditures and revenues in these monarchies, many of the standard concepts of public finance (such as the Benefits Principle, Ability-to-Pay Principle, Vertical Equity, and Horizontal Equity) do not provide relevant insights. Consequently, four innovative notions of equity are reviewed and discussed: Within Group Horizontal Equity; Within Group Vertical Equity; Favored Group Horizontal Equity; and Favored Group Vertical Equity. Finally, these four conceptions of equity are applied to a …

The Bid-Ask Spread In The Danish Stock Market: Evidence From The 1990s, Torben Voetmann

Finance

This paper investigates the cost components of bid-ask spreads around earnings announcements on the small Danish stock market in the 1990s. The results indicate that negative earnings surprises convey pricing information, suggesting the existence of significant information asymmetry between market makers and informed traders. Negative earnings surprises resulted in an increase in adverse-selection cost and trading volume while inventory-holding and order-processing costs decreased, leading to a combined decrease in the realized spread. The change in the realized spread is significant, while the change in the quoted bid-ask spread is negligible. Overall, the results suggest that informed traders’ ability to assess …

Using Option Theory To Determine Optimal Ira Investment, Treba Marsh, Todd A. Brown, Mary Fischer

Faculty Publications

Given the current uncertain economic trends, the decision to contribute to a personal retirement account can be a financial challenge taking a great deal of courage. Using the option theory, this paper presents arguments to justify the optimal contribution to maximize an IRA investment return.

Rodeo In The Classroom: Activity Based Costing Simulation, Nikki Shoemaker, Marie Kelly

Faculty Publications

This paper describes a classroom Activity Based Costing simulation called Rodeo in the Classroom. This simulation has been used in several introductory managerial accounting and cost accounting courses in order to help students understand the difference in the application of overhead between Job Order Costing and Activity Based Costing methods. Each student is assigned their own rodeo simulation and must calculate its cost using specific cost drivers. To verify their calculations, students with the same rodeos are grouped together to compare costs. Final rodeo costs are presented to the class where differences in cost allocations and reasons for these differences …

Analysis Of The Factors Impacting Etfs Net Fund Flow Changes, Stoyu Ivanov

Faculty Publications

PurposeThe purpose of this study is to identify the factors that impact the exchange-traded funds net fund flow changes on a daily basis.Design/methodology/approachA total of 1,212 different exchange-traded funds with a proprietary daily net fund flow data and logistic regressions were studied because the majority of the 1,212 exchange-traded funds have mostly zero daily net fund flow changes.FindingsIt was documented that in the period December 22, 2005 to July 28, 2010 autocorrelation at the daily frequency is not universally present for the 1,212 exchange-traded funds that we study, despite the fact that this is the case in the monthly data …

The Impact Of Authentic, Ethical, Transformational Leadership On Leader Effectiveness, Mary Kay Copeland

Business Faculty/Staff Publications

Authentic, ethical and transformational leadership in 21st century business leaders is needed. This research posits that ethical, authentic and transformational leaders are more effective, that there are incremental improvements in a leader’s effectiveness for each of these leadership qualities, and that transformational leadership moderates the impact of the leader’s authentic and ethical leadership on the leader’s outcomes. Analysis shows that authentic, ethical and transformational leadership behaviors make incremental independent contributions to explain leader effectiveness. The study did not find support for transformational leadership as a moderator of the relationships between authentic and ethical leadership behaviors and a leader’s effectiveness.

Ipo Firms' Voluntary Compliance With Sox 404 As Evidence On The Value Relevance Of Internal Control Quality, Qianyun Huang, Kimberly Gleason, Leonard Rosenthal, Deborah Smith

Business Faculty Publications

Newly public firms are not required to comply with SOX 404 for their initial public offerings. This provides a unique setting in which to investigate the benefits of voluntary disclosure with SOX 404 and the value of information revealed as a consequence of compliance. We investigate whether voluntary compliance with SOX 404, either fully or partially, impacts the perceived risk of firms conducting IPOs on the first day of trading (reflected in underpricing) or following the IPO. Our results indicate that neither full compliance with SOX 404 at the time of the IPO, nor a managerial discussion of internal controls …

A Case Study Exploration Of Blue-Collar Worker Retirement Plan Investment Decisions, Mark Griffin, Steven Tippins

International Journal of Applied Management and Technology

The finances of blue-collar workers were the most acutely impacted as these workers lost their jobs during the Great Recession of 2007 through 2009. The literature revealed a minimal understanding of how blue-collar workers allocated funds for their retirement, and what their investments might be when they invested. To address this problem, the current qualitative study addressed (a) how blue-collar workers chose to invest or not invest for retirement and (b) how blue-collar workers diversified their portfolio if they chose to invest. Theoretical foundations of the study were based on regret theory and prospect theory. A nonrandom purposeful sample of …

Risk Management In The Venture Capital Industry: Managing Risk In Portfolio Companies, Dorian Proksch, Wiebke Stranz, Andreas Pinkwart, Michael Schefczyk

The Journal of Entrepreneurial Finance

Managing risk is one of the main activities of venture capital companies. Despite the fact that this topic is of high practical relevance, only little research was published on risk management performed by venture capital companies in their ventures. Hence, we conducted a structured literature review which was the basis for developing five hypotheses concerning measures to decrease failure risk in venture capital-backed ventures. We tested these hypotheses with an empirical data set of 93 venture capital-backed ventures in Germany using original deal data from nine different venture capital funds using a structural equation model. We showed that the experience …

2015-2016 Financial Summary, Morehead State University. Budget & Financial Planning Office.

Morehead State University Financial Summaries Archive

2015-2016 Financial Summary of Morehead State University.

Atm Services : Transforming The Customer Value Proposition, Colm Mckiernan

Theses

Managing risk has always been to the fore, in the CIT (Cash-in-Transit) industry. An accelerated rate of change and increasing market risks, now face the sector. ATM (automated teller machine) servicing is an important market segment for CIT firms. Despite turbulence in the banking industry since the recent financial crisis, the ATM market has remained resilient. The desire for new levels of bank branch automation has been driving technology development in the ATM industry.

The author undertook qualitative research to determine how the customer value proposition for ATM services could evolve. ATMs are an important component of the overall cash …

Assessing The Level And Impact Of Financial Literacy On African Americans, Robert A. Amoah

Walden Dissertations and Doctoral Studies

Individuals are faced with making important economic decisions regarding retirement, savings, investing, and insurance. Across the globe, developed and emerging economies are experiencing growth in the sophistication of financial markets and products. Individuals require a greater degree of financial literacy to understand and explore these sophisticated and emerging financial markets and products. A review of literature revealed African Americans, however, lack the decision-making tools to function in the financial world. The purpose of this study was to assess the extent to which African Americans have financial knowledge. The sample size was 382 African Americans residing in Columbus, Ohio. The study …

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 …

The Effect Of Regulations On The Bottom-Line Of Traditional And Shadow Banks, Tsatsu Emmanuel Nyamadi

Walden Dissertations and Doctoral Studies

Return on equity is often associated with prudent risk-taking and the attraction of new clients in advanced economies like the United States, where shadow banks are not regulated. Researchers have contended that freedom from regulation encourages risk-taking and earning of higher profits, but there is a lack of empirical evidence addressing this relationship. The purpose of this quantitative study was to investigate whether lack of regulations result in increased return on equity. The theoretical framework was regulatory arbitrage by Ricks M, Gennaioli N, Shleifer A, and Vishny R. The research question addressed the relationship between regulation, profit margin, leverage, asset …

Sustaining Dental Practices Longer Than 5 Years, David Gagner

Walden Dissertations and Doctoral Studies

Dentists graduate dental school ready to practice dentistry, but 85% do not feel prepared by the dental school to open and manage the operations of a general dental practice. General systems theory grounded this multisite case study. The research provides information on 3 solo practitioner dental practices that sustained beyond 5 years in the Washington, DC suburbs. At each operating practice, the dentist who owned the practice and 1 employee that also worked at the practice during the first 5 years were interviewed. The dentist provided marketing documents used during the first 5 years of the practice operations. Data triangulation …

Strategies Agency Managers Use To Retain Recruiting Staff, Andrew Edward Borg

Walden Dissertations and Doctoral Studies

The high rate of employee turnover in the staffing industry is costly and impedes sustainability of employment agencies. The focus of this qualitative single case study explored strategies that 10 human resource managers (HRMs) and 5 HR directors used to retain recruiting staff at one regional recruiting agency in the southeastern region of the United States. The target population and research site were selected because of prior success in employee retention strategies. The conceptual framework grounding this study was sustainability theory. Methodological triangulation was achieved with semistructured interviews and focus group data. Data were thematically analyzed using Atlas.ti7, and all …

A Resource-Based Perspective On Financial Resource Strategies For Small Business Sustainability, Margaret N. Godwin-Opara

Walden Dissertations and Doctoral Studies

Each year entrepreneurs start many new businesses, and some of these businesses will fail within the first 2 years. In addition, many owners will cite lack of adequate financial resources as a contributory factor to the failure. The purpose of this multiple case study was to identify the strategies that some small business owners used to obtain financial resources needed to operate a financially sustainable business. The population consisted of machine shops in South Central Kansas. A resource-based view theory served as the conceptual framework that grounded the study. The data collection process consisted of 9 interview questions. The data …

Informational Efficiency And The Reaction To Terrorism: A Financial Perspective, Nicholas Roland

Honors Undergraduate Theses

The purpose of this study is to measure the message terror organizations hope to convey using the financial markets as a proxy of measurement to determine patterns within the marketplace and the effects on the terrorists’ ability to deliver a desired message due to the increased use of digital devices and access to instantaneous news, seen over the past decade. Using death count, geographic location, and event type, this study identified 109 attacks between 1985 and 2015 to be analyzed against 5 market indices and 5 securities. Measuring the effects within a 10-day sample window from the time of the …

A Strategic Marketing And Financial Analysis Of Toys R Us, Ethan S. Thomison

Lewis Honors College Capstone Collection

The following is a strategic marketing and financial analysis concerning the highly dynamic operations of Toys R Us.

Understanding The Global In Global Finance And Regulation, Lawrence G. Baxter

Faculty Scholarship

No abstract provided.

Misalignment: Corporate Risk-Taking And Public Duty, Steven L. Schwarcz

Faculty Scholarship

This article argues for a “public governance duty” to help manage excessive risk-taking by systemically important firms. Although governments worldwide, including the United States, have issued an array of regulations to attempt to curb that risk-taking by aligning managerial and investor interests, those regulations implicitly assume that investors would oppose excessively risky business ventures. That leaves a critical misalignment: because much of the harm from a systemically important firm’s failure would be externalized onto the public, including ordinary citizens impacted by an economic collapse, such a firm can engage in risk-taking ventures with positive expected value to its investors but …