Finance and Financial Management Commons^™

Inked With Debt: An Overview Of The Student Debt Market And A Potential For Change, Brian Alexander Kean

Senior Theses

In a world of rapidly escalating amounts of student debt, the current system harms college stakeholders. Whether governments (state or federal), students, universities, or the economy, all parties are suffering in the current student debt market. At this point in time, student loans have become a sizeable debt vehicle second only to mortgage debt in the United States. A majority of students use loans to attend school, which often become a major decision in post-graduation plans. In addition, it is the only form of debt not dischargeable in bankruptcy. Due to this, an alarming amount of Americans have become ensnared …

The Effect Of Mortgage Timeline On The Investor's Portfolio, Grace Marie Wylie

Senior Theses

This thesis project creates a hypothetical situation in which individuals choose either a thirty-year or fifteen-year fixed-rate mortgage on the same house at the same time and uses historical data to simulate the stock portfolios resulting from investment strategies based on this choice. Both strategies have the same time horizon and total monthly payment, so investors should be indifferent between the two. Using the fifteen-year strategy, the investor pays a higher mortgage payment every month for fifteen years then invests the entire amount of the payment in the stock market monthly for the next fifteen years. Using the thirty-year strategy, …

Commonalities Of Asset Pricing Bubbles, Lauren Frances Pensegrau

Senior Theses

The focus of this thesis will be to examine the similarities between the 2007-2008 Subprime Mortgage Crisis and other crises resulting from the collapse of an asset pricing bubble throughout United States financial history. Particular emphasis will be placed on the real estate and stock bubbles of the 20th century, including the events leading up to the Great Depression and the Savings and Loan (S&L) crisis of the late 1980s. I explore commonalities throughout the life cycle of a bubble, from the catalysts that lead to bubble formation, to the drivers that fuel both expansion and collapse, and finally, the …

The Benefits Of Global Diversification, David J. Tassone

Honors Thesis

International diversification reduces total risk to a portfolio by adding uncorrelated assets and brings higher long-term returns. In this study, the research looks to see if any single country index or continent index consistently outperforms a diversified value-weighted global market index. In order to value-weight the global index, the study uses the International Monetary Fund’s voting shares of each country and equates each voting share to each country or continent’s stake within the value-weighted global market index. To correct for currency exchange, the study uses iShares and other ETFs denoted in the United States Dollar. The value-weighted global market index …

Shareholder Advocacy In Corporate Elections: Case Studies In Proxy Voting Websites For Retail Investors, Robin Miller

Sustainability and Social Justice

One of the key rights shareholders retain is the right to vote on issues affecting the companies in which they invest. This voting right is seen as one of the primary means of exercising diligent corporate governance (Cole 2003, Fairfax 2009). Only 28 percent of individual investors vote in corporate elections compared with 91 percent of institutional investors. Informed voting decisions at corporate elections can be very information intensive, and theories of rational apathy and the free rider problem may explain a lack of participation from individual investors.

Many shareholders cannot attend annual corporate meetings, so they …

On The Behavior Of Entrepreneurial Factor Supply To The Firm, Nicos Zafiris

The Journal of Entrepreneurial Finance

This paper draws on an existing, but little used, approach to the choices governing the supply of ‘entrepreneurial’, in the sense of ‘residually remunerated’, resources to an enterprise, especially post start up. It focuses in particular on the hybrid ‘own factor demand/supply curve’ to the firm of Bronfenbrenner (1960), but attempts to treat such supply in conjunction with ‘contractual’ employment of resources, thus making use of gearing and portfolio concepts. To achieve this, it is found necessary for the hybrid schedule to be reinterpreted and recast as the locus of the relevant utility maximising choices. A model is presented which …

The Relationship Between The Behaviors Of The Top 50 Most Endorsed Athletes In The World And The Monetary Value Of Their Endorsement Deals, Rogerio B. Ribeiro

Undergraduate Honors Theses

The top endorsed athletes in the world are most likely the ones who have the biggest impact on their sport. These athletes are usually among the best in their sport or they might have something special that creates a strong relationship between the athlete and his or her fans. It is possible to say that this relationship combined with their skills on and off of the fields, courts, or arenas is what makes these athletes special. Big companies all over the world feel attracted to these athletes and, as a result, they spend millions of dollars every year in order …

Net Present Value Model Application For Identification Of Capital Gains/Loss In Athletic Investment, Ricardo Pabon

Undergraduate Honors Theses

This study evaluates whether there is a capital gain yield in the athletic investment decision allocating university resources to any component of athletics (teams, facilities, equipment, etc.) at any institution. The data for testing is analyzed by using the NET PRESENT VALUE MODEL which is composed of initial outlays, operating cash flows at time t, and cost of capital. This analysis will estimate if the investment decisions are correct or not.

Merger Means Of Payment And Analyst Biases Around Merger Announcement Date, Yiling Zhang

Finance and Real Estate Dissertations - Archive

I find strong evidence that analysts report downward-biased earnings estimates on acquiring firms when the earnings announcement date is within a 60-day window prior to the merger and acquisition (M&A) announcement date. Acquiring firm stocks have a greater positive realized forecast error in cash only transactions on the earnings announcement date compared to acquirers involved in pure stock transactions. In addition, analysts are more likely to upgrade their recommendations of acquirer stocks in cash only transactions compared to pure stock transactions within a 90 day window of the M&A announcement date. Finally, an increase in the market-to-book ratio leads to …

Fear And The Housing Market, Sergiy Saydometov

Finance and Real Estate Dissertations - Archive

In this dissertation, I use Google search frequency to construct a new measure of housing market-level sentiment and analyze its relation with housing prices. I term this measure as the Home Price Fear Index, or Fear Index or Fear for short. The Fear Index is based on Google Search volume for certain real estate and economic terms, such as foreclosure, recession, and market value. In the first essay, I examine the relation between the Fear Index at the national level and the Case/Shiller National Home Price Index. I find this relation to be inverse, with an increase in Fear predicting …

Reanalyzing The Political Stability Of Britain's Democratization, Nathan R. Burton

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

A recent article in Journal of Economic History by Dasgupta and Ziblatt uses bond yields to analyze the political risk of the 19th century democratization legislation of Britain known as the Reform Acts. Dasgupta and Ziblatt find that the volatility of yields is relatively high during periods of legislation, and model the yields via GAM method, concluding that the political risk associated with the Reform Acts was high. I reproduce the study and comparing those times of 'high' volatility to all periods and find nothing to compare high-volatility periods to, suggesting that it is inconclusive whether the Reform Acts were …

Single Stock Futures And Stock Options: Complement Or Substitutes, Cuyler Strong

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

Are single stock futures and stock options complement or substitute goods? In this study, I test this research question by examining option trading activity (option volume and open interest) surrounding an arguably exogenous introduction of single stock futures. This event study provides a natural experiment that allows us to make causal inferences about how the presence of single stock futures affects the options market. While it is commonly thought that single stock futures and options are substitute goods, my evidence instead suggests that they are complements. While I observe very little change in option volume surrounding the introduction of single …

Hedging In Energy: The Case Of Linn Energy, Llc, Riley E. Nelson

Finance Undergraduate Honors Theses

This paper is a case study of LINN Energy, LLC over the period of Q1 2013 to Q4 2015. Due to volatility in commodity prices, energy companies choose to hedge their future production using forwards, futures, swaps, and options strategies. I selected LINN Energy as the subject for this study due to the breadth of detailed historical hedging information available through the company’s website. LINN Energy disclosed much more than is required for independent oil and gas companies, making them the perfect case study for this thesis. LINN Energy, LLC is one of the few publicly traded LLC’s and is …

Outperforming The S&P 500 Using Top-Down Asset Allocation, Benjamin Lanier

Finance Undergraduate Honors Theses

This paper investigates whether portfolio managers can outperform the S&P 500 index using top-down asset allocation, using historical returns, standard deviations, and correlations of different asset classes. Efficient diversification between asset classes reduces the idiosyncratic risk by selecting assets from a wide variety of different classes of assets in different parts of the world. The goal is to create an optimization model that makes it possible for a portfolio manager to generate higher expected returns, while taking risk equal to that of the S&P 500, or incur lower risk while generating the same expected return of the S&P 500.

The Fall Of Petrobras And Its Impact On The Brazilian Economy, Nicolas Lema Severich

Finance Undergraduate Honors Theses

This paper investigates the full scope of the poor decisions made by the Brazilian oil giant, Petroleo Brasileiro. This paper is focused on the midst of a corruption scandal that ended the hopes and dreams of an entire nation. Fundamental analysis as well as technical analysis are used to determine the intrinsic value of Petrobras. Petroleo Brasileiro is analyzed as an oil company, as a mother company for the Brazilian economy and as the disruptor of a recession that will be remembered historically.

The Overlap Of Cross Sectional And Time Series Momentum Strategies, Samuel Adams

Finance Undergraduate Honors Theses

This paper contributes to existing literature by providing an analysis of combined time series momentum and cross sectional momentum strategies in the Dow Jones Industrial Average from February, 1991 to December, 2015. Combined momentum strategies are shown to not outperform cross sectional momentum strategies, and all momentum strategies tested are shown to under perform the market index. The twelve month historical return serves as the foundation from which the momentum strategies are formulated. Holding periods discussed in this paper include portfolio’s offset by one month from the historical return calculations . Momentum results during the time period analyzed are driven …

The Financial Stability Of Nonprofit Organizations, Heather M. Blalack

Finance Undergraduate Honors Theses

Abstract

This thesis evaluates the financial stability of nonprofit organizations and their ability to effectively facilitate the accounting functions of a business. Specifically, it focuses on the companies’ ability to maintain steady cash flow and fulfill all financial obligations while also achieving commitments stated in the company’s mission statement and core values. In addition, this analysis concentrates on the immense lack of knowledge and experience pertaining to financial management within many nonprofits as well as the scarcity of related trainings. As most administrators of nonprofits lack the proper training or background pertaining to financial oversight, there is often an imbalance …

Strategic Asset Allocation For Fixed Income And Fixed Income-Like Securities In Anticipation Of A Bear Market, Ngoc B. Phan

Finance Undergraduate Honors Theses

In a market contraction, it is often beneficial to actively manage fixed income and fixed income-like portfolio via strategic asset allocation. Many fixed income securities tend to outperform equities during market contractions owing to their fixed payment streams, lower volatility, and higher position in capital structure. This study seeks to estimate a set of optimal asset allocation portfolios in anticipation of recessions empirically using historic inflation-adjusted data. I apply mean-variance optimization to find optimal portfolio mix, discuss investors of different risk levels and discuss performance of portfolios in growth, recession and long-term periods.

The Millennial Investor: Mutual Funds Versus Exchange Traded Funds, Terrell Mclendon

Finance Undergraduate Honors Theses

This research paper seeks to understand the Millennial investor. The distinct purpose of this research is to determine if Millennials in the U.S., specifically those ages 25 to 35, prefer investing in exchange traded funds to mutual funds. Additionally, this research seeks to discern if these Millennials prefer investing online to working with a personal financial advisor. Secondary research was utilized extensively to compile a review of existing literature on the topics of the Millennial generation, mutual funds, exchange traded funds, personal financial brokers, and online investing sites. Primary research was completed through a questionnaire survey to gather new data …

The Relation Between University Endowment Fund Size And University Reputational Rankings, Jason Wolbrom

Financial Analyst

Universities compete with each other to admit the best students and achieve the highest quality ranking. Students use reputational ranking to determine which institution they want to attend. Universities use student tuition plus alumni donations to establish an investable endowment fund. In this paper, multiple analyses are run to investigate the relation between reputational rankings and endowment funds between 2006 and 2014. The main and surprising finding of the paper is that the expectation of a strong positive link between the two rankings is not borne out by the data. One additional interesting finding is that the lower a university’s …

Private Equity Investment In High Growth Companies: Selection & Performance, Andrew Mcalpine

Financial Analyst

Over the years, private equity buyout funds (PEs) have become increasingly interested in investing in high growth entrepreneurial firms, which has traditionally been an investment territory of venture capital funds (VCs). There is a dearth of study on how PEs invest and perform in the so-called “growth equity” space. The purpose of this research paper is to fill this void in the extant literature by comparing the characteristics of investments by PEs to those by VCs in entrepreneurial companies between January 1990 and December 2014. My research finds that both investment round size and company valuation are larger when PEs …

Effect Of Automated Advising Platforms On The Financial Advising Market, Benjamin Faubion

Accounting Undergraduate Honors Theses

This thesis outlines the cost to investor differences between a traditional financial advisor and the growing group of highly competitive automated Robo-Advisors.

Do Investors Value The Required Stress Tests Of Financial Holding Companies?, Brendan A. Colligan

Finance Undergraduate Honors Theses

This paper explores the value of disclosing stress test results to investors and market participants within the US financial system. Recently the Federal Reserve (“Fed”) expanded its required internal stress testing program, often referred to as the Dodd-Frank Act Stress Test (“DFAST”), to include bank holding companies (“BHCs”) with more than $10 billion in total assets. These BHCs were required to publicly disclose their results for the first time in June of 2015. Large BHCs are subject to another level of stress testing implemented by the Comprehensive Capital Analysis Review (“CCAR”). Large BHCs are defined as having more than $50 …

Financial Performance In Upstream, Downstream, And Integrated Oil Companies In Response To Oil Price Volatility, Jonathan P. Garcia

Finance Undergraduate Honors Theses

This paper investigates the relation between crude oil price volatility and stock returns among oil companies using a three-part methodology, by using the West Texas Intermediate (WTI) as oil price benchmark. I asses the various indicators that set signals for oil price volatility and the interpretation of each (PMI, S&P500, DJIA, and World Crude Oil Output). This research also focuses on the relation between different types of companies in the oil industry (integrated, upstream, and downstream) and how each type of company will be assessed in a particular way to predict abnormal returns, based on market data and statistical analyses …

Correlation Between Shareholder Concentration And Firm Performance With Regard To Midcap Companies, Wynn Lemmons

Finance Undergraduate Honors Theses

The research herein explores the correlation between performance and shareholder concentration. This paper compares the performance of a group of companies with a single shareholder stake of over 10% from the universe of the S&P 400 Midcap Index to the performance of the index itself over a period of eight years (January 1, 2009 to January 1, 2016). When run as a simulated portfolio, the group selected generated a slight amount of positive alpha, but the results were ultimately statistically insignificant.

Profit Shifting And Manipulation, Byron Dela Rosa

Renée Crown University Honors Thesis Projects - All

As of late, many U.S. firms have made their way overseas in ways many feel are unethical. U.S. multinationals have taken note of the unimaginable domestic corporate income tax rate the United States has set for these U.S. corporations. Similar to an individual paycheck you may receive, you must pay a portion to the U.S. government in taxes. And even more similarly, you wish that you did not have to pay it either. U.S. multinationals have the same mindset, as they have found ways to avoid the corporate income tax through foreign activity strategies. Using scholarly research papers and well-renown …

What Citizens Want To Know About Their Government’S Finances: Closing The Information Gap, Meagan Jordan, Juita-Elena (Wie) Yusuf, Martin Mayer, Kaitrin Mahar

School of Public Service Faculty Publications

There is an information gap between citizens and their governments when it comes to government finances. The inherent complexity of fiscal policy makes it exceedingly difficult for effective public participation. Effective public participation in fiscal decision making must address informing or educating the citizenry with accurate and meaningful government financial data. Better understanding citizen wants and perceptions is critical to closing the information gap between users and providers of financial information. This study uses information gathered from focus groups with residents of Norfolk, Virginia that asks what government financial information they want and how to make that information useful. Results …

Financial Literacy In High School Education, Chelsea N. Simmons

Honors Theses

Personal finance has become increasingly complicated in the past thirty years due to globalization and financial engineering. Americans are faced with new financial products and decisions, and many do not have the knowledge or expertise to successfully manage their finances. Financial literacy is especially low among young adults. Individual states have responded by introducing a personal finance course into the high school curriculum. This course may be an elective or a requirement for graduation. This study begins to examine personal finance curriculum in high schools and the effect such coursework has on overall financial literacy when students reach college.

The Question Of Financial Career Paths: Which Graduate Program And/Or Professional Certification Leads To The Greatest Income And Level Of Satisfaction Based On A Survey Of Professionals Working Within The Accounting/Finance Fields?, Tanner M. Shaw

Honors Theses

Thousands of men and women across the United States graduate from accounting and finance undergraduate programs and find themselves uncertain about what the future holds and what steps should be taken in order to maximize their odds of meeting their personal goals related to job satisfaction and level of income. This study aims to evaluate graduate degree and non-graduate-degree alternatives, as well as the CPA and CFA professional designations in terms of the likelihood of each route leading to high job satisfaction and a high level of income. To that end, a survey of successful accounting and finance professionals was …

High Frequency Trading: Perceptions Regarding Volatility And Regulation, Daniel A. Beck

Honors Theses

Although high frequency trading (HFT) makes up a large portion of day to day trading activity in US and global markets, Khashanah and colleagues (2014) found that nearly half of academic and business industry professionals feel that HFT provides an unfair advantage relative to other market participants, and that a majority of industry professionals share concerns that HFT increases volatility in markets. This creates an environment wherein there are increasing calls by various groups for increased regulation of HFT, and the same study by Khashanah et al (2014) finds that 59% of academics and 46% of industry professionals are of …