Finance Commons^™

Relationship Between Interest Rate And Bank Common Stock Return: Evidence From The Top 10 United States Banks And Financial Sector Index, Hieu Trung Tran

Honors Projects in Finance

This research paper investigates the effect of changes in long-term interest rates on the returns of the top 10 US banks included in the Financial Sector Index. There are three main parts of this paper.

The first part uses the Augmented Dickey-Fuller (ADF) test to test the “Random Walk” of banks’ common stock returns. Based on the test’s results, returns of banks’ common stock do not solely follow the “Random Walk”.

In the second part, the Two-Factor Arbitrage Pricing Theory is employed to test the effect of changes in long-term interest rate on the return of banks’ common stocks. The …

Private Student Loan Asset Backed Securities: A Default Curve Analysis, Nicholas Gentile

Honors Projects in Finance

Business and mainstream media devote significant attention to the student lending industry and its possible threat to the economy. While the private loan component of student lending may not be largest part of this one trillion dollar industry, it is likely to be the space where evidence supporting the media’s concerns are found. This paper examines the variation in cumulative default rates for private student loan asset backed securities issued between 2001 and 2007, revealing the dynamics of these opaque financial instruments. The study analyzes internal pool data and external economic data, uncovering the primary factors that shape the respective …

The Cost Of Culture The Impact Of National Culture On The Pass-Through Of Commodity Shocks, Christine Gerrity

Honors Projects in Finance

This study analyzes the impact of national culture on the pass-through of commodity price shocks to retail goods. In particular, this study explores the commodities of coffee, cotton and steel. Through the use of regression analysis, this study looks to determine the relationship between two key predictive variables: risk tolerance of a country and commodity shocks within a company’s associated commodity market, and their impact on the value of companies within that country. Additional factors are explored at the firm financial level and the firm country level. The purpose of this study is to examine if consumers of one country …

Initial Public Offerings In The Microfinance Industry: Does A Mission Drift Occur?, Sarah Segill

Honors Projects in Finance

This thesis analyzes whether or not there is a mission drift when microfinance organizations become publicly traded entities. One of the most debated criticisms of microfinance institutions (MFIs) today involves becoming for-profit organizations in attempt to raise more capital. Donor funding is limited for non-profit organizations and does not give an MFI much room to grow to serve a maximal number of people. The entry of for-profit microfinance institutions has a great deal of possibility in terms of generating scale, efficiency and innovation. Yet these for-profit institutions can easily lose track of their social mission to serve the poor and …

The Impact Of New Product Announcements On Quick Service Restaurant Companies’ Stock Returns, Tim Drechsler-Martell

Honors Projects in Finance

This study seeks to answer two main questions: 1) Do product announcements impact quick service restaurant stock returns? 2) Do economic conditions impact the degree which product announcements impact quick service restaurant stock returns? 159 total product announcements were collected for 6 quick service companies: McDonald’s Corp., YUM! Brands Inc., The Wendy’s Co., AFC Enterprises Inc., Jack in the Box Inc., and Sonic Corp. 84 of these announcements were from 2005-2007 (Labeled “Pre-Recession”), and 75 were from 2009-2011 (Labeled “Post-Recession”). Using historical stock price data, an analysis of the overall trends of the mean-adjusted excess returns was conducted to determine …

The Remittance Intentions Of Second-Generation Ghanaian-Americans, Kirstie Kwarteng

Capstone Collection

Remittances have become an integral part of economies all over the Global South and Ghana is no exception. Official accounts estimate that remittances to Ghana have been as high as US $1 billion a year, although the true number is likely to be much higher as funds are also remitted through informal channels. This is a significant inflow of foreign currency, sent almost completely by first generation Ghanaian immigrants abroad. To maintain this level of inflows over the long run, however, would require that second-generation Ghanaian immigrants continue to remit at the same level as their parents. This study examines …

A Skeptic’S Case For Sovereign Bankruptcy, Anna Gelpern

Georgetown Law Faculty Publications and Other Works

This essay describes fundamental flaws in the sovereign debt restructuring regime, but questions the prevailing arguments for sovereign bankruptcy. The author concludes that efficient debt outcomes may well come about without bankruptcy, but that a statutory regime is necessary to achieve sovereign autonomy and political legitimacy.

The Euro Area Crisis: Origins, Prospects And Implication For The World Economy And Global Governance, Domenico Lombardi

Brookings Scholar Lecture Series

European nations have adopted a common currency and created regional institutions but they are also undergoing the greatest crisis in the integration since the end of World War II. This presentation will explore Europe’s regional integration, assess this process in light of the current crisis, and consider lessons to be learned for other regions, notably Asia.

Qualitative Meta-Analysis On Three Aspects Of The Federal Budget: The Process, Politics And Policies, Morgan B. (Hittinger) Weiss

Selected Honors Theses

Over the last few years, policymakers and the media have paid special attention to the federal budget, deficits and the national debt as the recent recession plunged the nation into the red. In response, some called for fiscal tightening while others simultaneously advocated for further stimulus spending to accelerate the recovery. Beyond the debate on how to respond to the short-term deficits caused by the recession and a sluggish recovery are discussions of looming budgetary struggles. The medium to long-term budget concerns are driven primarily by the United States’ rapidly aging society and rising health care costs. These two factors …

Grinding Decline In Springfield: Is The Finance Control Board The Answer?, Robert Forrant

New England Journal of Public Policy

Springfield, Massachusetts, the Bay State’s third largest city, suffered staggering manufacturing job loss over the last thirty years of the twentieth century. In 2004, the financial impact of job loss, coupled with dubious fiscal management, plunged the city into near bankruptcy. In response, state government passed legislation appointing a Finance Control Board to manage city business. Wage freezes for City workers were continued and cuts in numerous essential services occurred to deal with the debt. But the question remains, can a Control Board approach grow a large stock of well-paying jobs — large enough to grow the city’s and the …

The Natural: How One High School Football Star, Economics Major, Ex-It Manager, Red Sox Fan, Proponent Of A "No-Jerks" Policy, And Kids' Baseball Coach Has Risen To The Top Of International Banking, Gerry Boyle

Colby Magazine

Bob Diamond ’73 is an ex-linebacker, former IT manager, devoted Red Sox fan, and youth baseball coach. He also has managed to rise to—and excel at—the highest levels of international banking.

Risk-Neutral Modeling With Affine And Nonaffine Models, Garland Bennett Durham

Finance

Option prices provide a great deal of information regarding the market’s expectations of future asset price dynamics. But, the implied dynamics are under the risk-neutral measure rather than the physical measure under which the price of the underlying asset itself evolves. This article demonstrates new techniques for joint analysis of the physical and risk-neutral models using data from both the underlying asset and options. While much of the prior work in this area has focused on affine and affine-jump models because of their analytical tractability, the techniques used in this article are straightforward to apply to a broad class of …

Exchange Rate Pass-Through To Domestic Prices In Nigeria: An Empirical Investigation, Abdulrasheed Zubair, George Okorie, Aliyu R. Sanusi

Economic and Financial Review

This paper uses the impulse response from an estimated structural autoregressive model of the inflation process to estimate the dynamic exchange rate pass-through to consumer prices for Nigeria, using quarterly data for the period 1986-20I0. The results suggest that the exchange rate pass-through is incomplete, low and fairly slow. On impact, for instance, the elasticity of inflation to exchange rate changes is about 0.02, and it takes about eight quarters to reach its full-impact of only 0.26. We argue that given the large share of imports in Nigeria's consumption basket, this surprisingly low pass-through indicates that importers practice the so-called …

Consolidated Public Safety Answering Point (Psap) Feasibility Study For Richland County Ohio, Daila Shimek, Eugene Kramer, Patrick Johnson, Charlie Post

All Maxine Goodman Levin School of Urban Affairs Publications

This report provides an assessment of the feasibility of consolidation of two public safety answering points in Richland County, Ohio. The report describes the methodology used to assess the feasibility. The findings are that consolidation of dispatch services among the potential participating entities is feasible. Consolidation of services would reduce capital costs expended across the county for public safety emergency dispatching over the long term. Given the proposed investment equipment and staff, the level and quality of service provided by a consolidated dispatch center should exceed those currently being supplied.

The Role Of Financial Literacy And Consumer Protection In Fostering Financial Inclusion, Dutse Umma

Bullion

The objective of this paper is to establish the link on how financial consumer protection efforts and financial literacy initiatives help bring people on board the formal financial system. Among the key mandate of the Central Bank of Nigeria (CBN) is the promotion of a sound financial system, while a stable financial system cannot be easily captured in a few words, the attributes that could be demonstrated in a system that is described as financially stable will include public confidence and trust in the institutional framework. Financial stability, therefore, serves to instill confidence in users of financial services. It encourages …

Viable Agent Banking And Mobile Payment System In Nigeria, Fatokun Dipo

Bullion

Agent banking and Mobile payments, especially in developing economies are rapidly evolving and having tremendous impact on the economies and lives of its citizenry. In addition to reducing costs, these new service offering channel help to encourage customers to use financial services more often, as locations are close by and in places where the customers are familiar with. In light of the afore-mentioned, the Central Bank of Nigeria noted the rapid growth of mobile telephony and the need to leverage existing business network infrastructure as a practical and well thought-out strategy for driving financial inclusion of the unbanked in Nigeria.

Fuel Subsidy And Other Unproductive Public Expenditures Removal: A Pragmatic Approach To Restructure And Transform The Nigerian Economy, Lawrence O. Akinboyo

Bullion

While the short term measures to reduce recurrent expenditure are necessary conditions for fiscal sustainability, the long term imperative is to increase revenue. Thus, efforts should be made by the fiscal authorities in Nigeria to pursue the policy of balancing of expenditure with revenue improvements. The issues of the underperformance of the capital budget should be reversed before savings from cuts in recurrent expenditure can be diverted to the financing of capital expenditure. From the analysis, we say that removal of fuel subsidy would no doubt have some social and economic hardship on the people in the short run, However, …

Financial Inclusion In Nigeria: Measurements And Lessons, David Olu Ajakaiye, Afolabi Olowookere

Bullion

The operations of financial systems are crucial to people’s savings, credit, payment and risk management needs. More importantly, the inclusiveness of this system tends to benefit the poor and other disadvantaged groups in the society (Demirguckunt and Klapper, 2012). In the definition of the Centre for Financial Inclusion, “Full Financial Inclusion is a state in which all people who can use them have access to a suite of quality financial services, provided at affordable prices, in a convenient manner, and with dignity for the client” (Gardeva and Rynne, 2011). This entails building a financial system that serves as many people …

Communicating Financial Inclusion Policy In Nigeria: The Role Of The Media, Frank Aigbogun

Bullion

The Central Bank of Nigeria (CBN) has shown great foresight in the effort to ensure that greater numbers of Nigerians that are currently financially excluded are brought into the fold, through effective policy initiatives that are hinged on global best practices. For instance, in 2012 the Bank incorporated information and knowledge that will eventually lead to the formulation to amend existing regulatory frameworks, including recommendations on microfinance, mobile financial services (MFS) and agent banking. The CBN’s aim of educating and imparting skills on financial system inclusion to journalists who through their media would inform the general public about this all-important …

Inward Fdi In The United States And Its Policy Context, Lucyna G. Kornecki Ph.D.

Accounting, Economics, Finance, and Information Sciences - Daytona Beach

Inward foreign direct investment (IFDI) represents an integral part of the United States (U.S.)economy, with its stock growing from US$ 83 billion in 1980 to US$ 3.5 trillion in 2011. The United States, which had earlier been primarily a home for multinational enterprises (MNEs) rather than a host for affiliates of foreign MNEs, has become a preferred host country for FDI since the 1980s. Foreign MNEs have contributed robust flows of FDI into diverse industries of the U.S. economy, and total FDI inflows reached US$ 227 billion in 2011, equivalent to 15% of global inflows, the single largest share of …