Finance and Financial Management Commons^™

Asia Embraces Digital Currency And Cryptocurrency, David Kuo Chen Lee

Asian Management Insights

A decade ago, everyone was sceptical about cryptocurrency. Today, Asian governments are harnessing its technology to raise payment efficiency and improve financial inclusion. Initially, the technology was advocated and harnessed by ‘cypherpunks’, that is, individuals who advocate the use of cryptography and other strong encryption technologies to promote social and political change. At that time, being a cypherpunk meant standing on the opposite side of the government; today, I see cypherpunks, otherwise more appropriately known as cryptopunks, working closely with governments.

The Influence Of United Arab Emirates National Culture On Leadership Styles In Higher Education Institutions, Hamsa Saleh Al Ammari

Dissertations

Academic institutions and universities are complicated organizations led by professionals and academics who owe their knowledge and skills to their experience in education and leadership. In a country like the United Arab Emirates (UAE), education leaders who come from different cultural backgrounds practice their daily duties within a context where the local national culture imposes certain assumptions, beliefs, norms, and attitudes on them, thereby controlling their understanding of leadership and shaping their behavior. There has been little academic research into what constitutes the national culture of the UAE, a young, cosmopolitan amalgamation of seven Emirates, viewed internationally as an Arab, …

Joint News, Attention Spillover, And Market Returns Predictability, Li Guo, Lin Peng, Yubo Tao, Jun Tu

Research Collection Lee Kong Chian School Of Business

We analyze over 2.6 million news articles and propose a novel measure of joint news coverage of firms. The measure strongly and negatively predicts market returns, with a monthly R-squared of 3.93% in sample and 6.52% out of sample. The relation is causal, robust to existing predictors, and is especially strong when market uncertainty is high or when market frictions are large. At the firm level, joint news coverage is associated with a 20.3% increase in EDGAR downloads by new IPs from the investor bases of the other covered firms. Our evidence suggests that joint news triggers investor attention spillover …

A Bibliometric Analysis Of Behavioral Finance And Behavioral Accounting, Bharati Singh

American Business Review

This paper presents a bibliometric analysis of relevant publications in the field of behavioral finance and behavioral accounting. The analysis shows that the emerging themes of research in recent years in behavioral finance is on investors’ sentiment, social media, investors’ attention, and financial literacy. In the field of behavioral accounting, biases such as  overconfidence, framing effects or cognitive constraints on information processing, have been explored in greater detail. Other than cognitive biases, this field includes studies such as behavioral tax, organizational ecology, and performance evaluative style of organization, among others. Interestingly, our analysis suggests that research in behavioral accounting …

Making Money From Cryptocurrency? The Taxman May Call On You, Hern Kuan Liu, Vincent Ooi

Research Collection Yong Pung How School Of Law

Miners, forgers, hobbyists, traders – different rules apply. Just don’t assume crypto investment is somehow immune to taxation.

Stock Return Prediction Using Financial News: A Unified Sequence Model Based On Hierarchical Attention And Long-Short Term Memory Networks, Haoling Chen, Peng Liu

Research Collection Lee Kong Chian School Of Business

Stock return prediction has been a hot topic in both research and industry given its potential for large financial gain. The return signal, apart from its inherent volatility and complexity, is often accompanied by a multitude of noises, such as other stocks’ performance, macroeconomic factors and financial news, etc. To better characterize these factors, we propose a new model that consists of two levels of sequence: an NLP-based module to capture the sequential nature of words and sentences in the financial news, and a time-series-based module to exploit the sequential nature of adjacent observations in the stock price. In this …

Volatility Timing Under Low-Volatility Strategy, Poh Ling Neo, Chyng Wen Tee

Research Collection Lee Kong Chian School Of Business

The authors show that the slope of the volatility decile portfolio’s return profile contains valuable information that can be used to time volatility under different market conditions in the United States. During good (bad) market conditions, the high- (low-) volatility portfolio produces the highest return. The authors proceed to devise a volatility timing strategy based on statistical tests on the slope of the volatility decile portfolio’s return profile. Volatility timing is achieved by being aggressive during strong growth periods and conservative during market downturns. Superior performance is obtained, with an additional return of 4.1% observed in the volatility timing strategy, …

Algorithmic Transparency, Jian Sun

Research Collection Lee Kong Chian School Of Business

I study the optimal algorithmic disclosure in a lending market where lenders use a predictive algorithm to mitigate adverse selection. The predictive algorithm is unobservable to borrowers and uses a manipulable borrower feature as input. A regulator maximizes market efficiency by disclosing information about the statistical properties of variables embedded in the predictive algorithm to borrowers. Under the optimal disclosure policy, the posterior belief consists of two disjoint regions in which the borrower feature is more relevant and less relevant in predicting borrower quality, respectively. The optimal disclosure policy differentiates posterior lending market equilibria by the equilibrium data manipulation levels. …

Socially Responsible Corporate Customers, Rui Dai, Hao Liang, Lilian Ng

Research Collection Lee Kong Chian School Of Business

Corporate customers are an important stakeholder in global supply chains. We employ several unique international databases to test whether socially responsible corporate customers can infuse similar socially responsible business behavior in suppliers. Our findings suggest a unilateral effect on corporate social responsibility (CSR) only from customers to suppliers, an evidence further supported by exogenous variation in customers’ close-call CSR proposals and by product scandals. Customers exert influence on suppliers’ CSR through positive assortative matching and their decision-making process. Enhanced collaborative CSR efforts help improve operational efficiency and firm valuation of both customers and suppliers but increase only the customers’ future …

Projected Versus Actual On-Campus Student Enrollment During The Covid-19 Pandemic For Fall 2020 At Purdue University: A Quantitative Analysis Of Purdue Office Of Enrollment Management Data, Max Bebekoski

The Journal of Purdue Undergraduate Research

No abstract provided.

Fall/Winter 2021

Business Exchange

Flexibility Is Our New Norm; $8 Million Bequest Supports Student Scholarships; Women in Entrepreneurship Institute Partnership Supports Business Founders of Color; College Named a Bloomberg Experiential Learning Partner; MacArthur Foundation Grant Supports Housing Research; Navigating the New Workplace Norms; Professor Introduces Students to Fintech Innovations; Accounting Graduate Brews Coffee Business with Soul

Investing In Financial Literacy Education: Purdue Libraries’ Quest To Promote Financial Wellness, Zoeanna A. Mayhook

Midwest Business Librarian Summit (MBLS)

Many information challenges that people face in their lives will relate to managing their own personal finances. Whether they are buying a house or looking to make wise investments, attaining a combination of financial and information literacy skills can promote sound financial decision-making practices and result in long-term financial independence and well-being. Business information professionals can aid in this endeavor by providing resources and programming to develop these skills further. With the generous support of the Purdue Federal Credit Union, the Purdue Libraries have prioritized financial literacy education by fostering strategic partnerships, developing instructional materials, and incorporating personal financial competencies …

Syllabus For Financial Management, Maura Dowling

Resources

This course deals with the financial management of the business enterprise and the role of the financial manager in value creation. The focus of this course is the increasing global dimension that the financial managers must address. Major topics include the time value of money, risk and return, security valuation, capital budgeting, cash and liquidity management, management of current liabilities, dividend policy, cost of capital, capital structure policy and the evaluation of alternative methods of financing. While this course deals with common finance problems, these problems are analyzed in a broader context with an international emphasis.

Sinwattana: Capital Crowdfunding For Thai Smes, Singapore Management University

Perspectives@SMU

A Singaporean entrepreneur falls in love with Thailand, and creates the country’s first online equity crowdfunding platform

The Unknown Benefits Of Black Markets, Singapore Management University

Perspectives@SMU

Research on the license plate market in China’s capital finds that black markets can potentially serve as an auction mechanism to redistribute limited resources to those in need

The Ursinus College Investment Management Company Newsletter, Fall 2021, Scott Deacle, Maureen Cumpstone, Zachary Crebbin, Maddy Sorokanych, Michael Buck, Kareem Elghawy

Investment Management Company Newsletter

Inside this issue:

Letter from Madelynn Sorokanych '22

Letter from Michael Buck '22

At a Glance

Investment Strategies

Endowment at Work

UCIMCO Updates

Notable Trends

Semester Investment Performance

Endowment Outlook

Stock Selection Picks

Women's Fund Picks

Our Team

Special Thanks

Supporters

How to Contribute

Active Factor Investing: Hedge Funds Versus The Rest Of Us, Jun Duanmu, Yongjia Li, Alexey Malakhov

Finance Faculty Publications and Presentations

We examine whether the success of hedge fund market timing strategies can be replicated. We develop a methodology for creating a portfolio of ETFs to capture risk factor exposures of market timing hedge funds identified using extant market timing measures. We find that the top market timing hedge funds outperform their ETF clone peers and the superior performance cannot be replicated. We show that the irreplicable market timing skills are more profound in certain hedge fund styles. Finally, we provide evidence that the success of market timing strategies is driven by non-cloneable hedge funds that possess managerial skills.

Ucimco Endowment Semi-Annual Presentation, Fall 2021, Kareem Elghawy, Kyle Blaze, Jeremy Calabro, Ryan Carkhuff, Jacob Connelly, Christopher Craven, Zachary Crebbin, Olivia Defusco, Colin Holtzman, Brooke Hurley, Matthew Mcmahon, Jared Minnichbach, Zoey Nikolaou, Jared O'Connell, Erik Ojert, Thomas Pancheri, Christopher Porzelt, Tyler Sargent, Scott Sloan, Storm Snape, Matthew Snyder, Matthew Tuley

Business and Economics Presentations

The Ursinus College Investment Management Company (UCIMCO) consists of groups of student analysts who manage endowment-style and stock selection funds on behalf of the college endowment. This presentation, by the endowment team, examines performance and investment philosophy while discussing selections in the portfolio including: developed and emerging market equities, U.S. equities, corporate bonds, U.S. treasuries and U.S. real estate.

Ucimco Stock Selection Semi-Annual Presentation, Fall 2021, Michael Buck, Stevie Benson, Walker Hamilton, Mason Jolivette, Harrison Lorenc, Devin Molina, Stephen Schoenborn, Jack Shimer, Mohammad Sufyan, John Wagner, Riley Yee

Business and Economics Presentations

The Ursinus College Investment Management Company (UCIMCO) consists of groups of student analysts who manage endowment-style and stock selection funds on behalf of the college endowment. This presentation, by the stock selection team, examines quarterly performance and strategy while discussing the most recent selections in the portfolio: Agios Pharmaceuticals, CubeSmart, Splunk and Nexstar Media Group.

Ursinus College Women's Investment Management Company, Fall 2021, Maddy Sorokanych, Taylor Beaumont, Shelby Boyle, Laura Bradley, Olivia Defusco, Rachel Grossbauer, Jess Gutekunst, Rebecca Lewis, Alice Nathanson, Madelyn Nau, Ketlee Staz, Marcella Thanh-Guyet, Theodora Zeibekis

Business and Economics Presentations

The Ursinus College Investment Management Company (UCIMCO) consists of groups of student analysts who manage endowment-style and stock selection funds on behalf of the college endowment. In 2020, a group of women students began to manage their own fund. This presentation reviews activities of the Fall 2021 semester and analyzes the stock performance of various companies including: Anthem, Inc., American Well Corporation, Netflix, Travel and Leisure Company, Cognizant Technology Solutions, Oshkosh and the Hershey Company.

Do Large Losses Loom Larger Than Gains? Salience, Holding Periods, And The Disposition Effect, Vladimir Kotomin, Abhishek Varma

Faculty Publications – Finance, Insurance, and Law

Individual investors are more likely to sell stocks with nominal gains and losses that are large relative to their brokerage portfolio value. The salience of nominal gains and losses affects stock sales in both taxable and tax-deferred accounts and across investor groups, but the effect of nominal losses is weaker for stocks with high valuation uncertainty. The effect has a time dimension: at short holding periods, individuals are more likely to sell stocks with large nominal losses than gains of the same size, mitigating the disposition effect. Investors may be compelled to revisit their beliefs after incurring large losses quickly.

Roles Of Acquirer Financial Advisors In M&A Deal Completion, Scarlett Pho

Senior Theses

The central theme that this thesis addresses is the role of valuation by investment banks who act as financial advisors to M&A buyers by answering two questions relating to the process. The first question is if buyers should hire investment banks for a higher chance of success of deals. For the second question, I will examine buyers who hire investment banks for some certain characteristics of deals. This study focuses on M&A deals that happened between 2012 and 2015, especially between advisor and nonadvisor, successful and failed deals. The conclusion presented in this thesis will be contributable to the understanding …

Esg And The Market Return, Ran Chang, Liya Chu, Jun Tu, Bohui Zhang, Guofu Zhou

Research Collection Lee Kong Chian School Of Business

We propose an environmental, social, and governance (ESG) index. We find that it has significant power in predicting the stock market risk premium, both in- and out-of-sample, and delivers sizable economic gains for mean-variance investors in asset allocation. Although the index is extracted by using the PLS method, its predictability is robust to using alternative machine learning tools. We find further that the aggregate of environmental variables captures short-term forecasting power, while that of social or governance captures long-term. The predictive power of the ESG index stems from both cash flow and discount rate channels.

Tracking Retail Investor Activity, Ekkehart Boehmer, Charles M. Jones, Xiaoyan Zhang, Xinran Zhang

Research Collection Lee Kong Chian School Of Business

We provide an easy method to identify marketable retail purchases and sales using recent, publicly available U.S. equity transactions data. Individual stocks with net buying by retail investors outperform stocks with negative imbalances by approximately 10 bps over the following week. Less than half of the predictive power of marketable retail order imbalance is attributable to order flow persistence, while the rest cannot be explained by contrarian trading (proxy for liquidity provision) or public news sentiment. There is suggestive, but only suggestive, evidence that retail marketable orders might contain firm-level information that is not yet incorporated into prices.

A Biblical, Culturally Relevant, And Contextually Applicable Financial Literacy Curriculum, Wallace Kanyuira

Doctor of Leadership

Poverty in Kenya is high, and the church should respond by economically empowering the people to be self-reliant. People are in poverty, not for lack of opportunities and resources, but because they lack the knowledge and skills to exploit these opportunities, make decisions they are ill-equipped to make, and lack financial literacy. Many people who are financially struggling tend to seek solace in churches. Consequently, pastors need to master and teach biblical financial literacy and reshape the church culture to be responsive. In Hosea 4:6 God says: “My people are destroyed for lack of knowledge. . . .” Biblical financial …

Investment Patterns In Mountain West States, Counties, And Nevada Cities 2005-2019, Peter Grema, Zachary Walusek, Katie M. Gilbertson, William E. Brown Jr.

Economic Development & Workforce

The purpose of this fact sheet is to summarize findings on capital flows across Mountain West states and counties, and within Nevada cities. The “Gauging Investment Patterns across the US” report by the Urban Institute present findings of overall volume of capital deployed, racial equity of investments, and income equity for each respective geographic area. The full report further breaks down these three main categories into 18 other metrics.

Institutional Investors And Bank Governance: An International Analysis Of Bank Earnings Management, Steve M. Miller, Rabih Moussawi, Bin Wang, Tina Yang

Finance Faculty Research and Publications

Despite the growing importance of institutional investors in global capital markets and the link between bank earnings management and financial crash risk, little is known about the role of institutional investors in mitigating bank earnings management. We conduct the first international analysis of this issue using a broad sample of banks and institutional investors. We find a negative relation between institutional ownership and bank earnings management, after controlling for the stringency of a country's bank regulations and other relevant bank and country characteristics. Additionally, institutional ownership is more negatively related to earnings management in countries with more-stringent bank disclosure requirements …

Digital Only Banks The Changing Face Of Global Banking: Challenges, Opportunities And Aml/Cft Implications For Nigeria, David N. Odu

Bullion

The drastic digitization brought about by evolution of technology in the world has changed almost every sphere of human life with the most recent effect being moved to cashless economy, while the role of digitization in the banking sector is altering customer demand and preferences, banks are becoming digitally oriented to meet the forces of demand and supply. This has led to the birth of digital-only also called challenger bankers or branches banks as they operate without a physical location, only have a location for admin purposes or hosting their servers. This growing wave of consumer oriented banking institutions focuses …

Questions For Discussion Board (Finance Course), Loren Cohen

Open Educational Resources

This assignment is designed to get students to think about the meaning behind the numbers. All too often, students calculate given scenarios without understanding why they are doing so. This will hopefully encourage deeper thinking.

A Study On Constructing The Fourth Financial Statement For The Performance Prediction And Value Assessment Of Internet Enterprises In The Food Industry, Jianxin Zhang

Dissertations and Theses Collection (Open Access)

For a long time, industry, financial institutions, PE investment funds, and capital market investors have determined the business performance and market value of a company, usually based on the data of the three audited financial tables provided by the company, and further comprehensive analysis will be carried out the evaluation. Due to the limitations of accounting standards, the three financial tables cannot truly reflect all the business conditions of the enterprise. At the same time, the economic stage with traditional manufacturing as the main body and the economic stage with the digital economy as the main body are concerned with …