Finance Commons^™

Financial Knowledge And Financial Literacy At The Household Level, Alan L. Gustman, Thomas L. Steinmeier, Nahid Tabatabai

Dartmouth Scholarship

There is evidence of a relation between numeracy and wealth held outside of pensions and Social Security. With pensions and Social Security accounting for half of wealth at retirement, and evidence that those with pensions save more in other forms, one would expect to find knowledge of pensions and Social Security influencing retirement saving. Yet we find no evidence that knowledge of pensions and Social Security is related to nonpension, non-Social Security wealth, to numeracy, or that it plays an intermediate role in the numeracy-wealth relation. Our findings raise questions about policies that would enhance numeracy to increase retirement saving.

Cultural Values Impact On Risk Perceptions A Comparison Of Cultural Indexes And Risk Premium, Anna Constantino

HIM 1990-2015

This paper examines how cultural values influence risk premium across the world. Cultural values are measured by four cultural indexes, power distance, uncertainty avoidance index, masculinity index, and individualism index, established by Geert Hofstede. Our methodology determines the risk premium by using the Dividend Discount Model, and then computes the regression analysis of each index's impact on average risk premiums. After analyzing 31 countries, results show the only statistically significant correlation found was between the individualism index and risk premium. The higher the individualistic nature of the culture was the higher the risk premium. This is attributed to the overconfidence …

Tracking Error Of Leveraged And Inverse Etfs, John Romano

HIM 1990-2015

Tracking ability of leveraged and inverse exchange traded funds can be very important to investors looking for a dependable return. If the investor wants to put their money on a certain index they feel strongly about, they expect their investment vehicle to track that return appropriately. Over the years, we have seen tremendous growth in the exchange traded fund industry. In 2006, leveraged and inverse funds were introduced to the market, allowing investors to take leveraged and directional trades on indices. These investment vehicles can be traded as easily as any stock, and therefore need some attention. Since any novice …

Can One Size Fit All? An Application Of Management Theory On The European Sovereign Debt Crisis, Amanda Grayson

Honors College Theses

The European Union is a combination of twenty-seven different and unique cultures under one common government. Can culture help explain the continued problems emanating from the European debt crisis?

In undergraduate management courses around the world, from Harvard University to Beijing International, eager young minds are taught the same fundamental management theories. Among others, one of the most popular would inevitably be Hofstede’s Cultural Dimensions.

Geert Hofstede, while working for the IBM research department, undertook a detailed survey and analysis of the various cultures of the world. He defined four dimensions of culture, now expanded to six, that can be …

Valuation Of Financial Derivatives Subject To Liquidity Risk, Yanan Jiang

UNLV Theses, Dissertations, Professional Papers, and Capstones

Valuation of financial derivatives subject to liquidity risk remains an open problem in finance. This dissertation focuses on the valuation of European-style call option under limited market liquidity through the dynamic management of a portfolio of assets. We investigate liquidity from three perspectives: market breadth, depth, and immediacy. We present a general framework of valuation based on the optimal realization of a performance index relative to the set of all feasible portfolio trajectories. Numerical examples are then presented and analyzed that show option price increases as the market transitions from liquid to less liquid state. Furthermore, buying and selling activities, …

Efficiency Of Fiscal Expenditures In Nevada Elementary Schools Using Data Envelopment Analysis, Todd Patrick Yocum

UNLV Theses, Dissertations, Professional Papers, and Capstones

For decades educational researchers have attempted to find links between school funding and student achievement. These attempts have generated many contradictory viewpoints and have produced many unanswered questions. Ever increasing accountability on states, districts and schools combined with severe financial strain has made measuring school fiscal efficiency a valuable tool for school leaders looking to get more student achievement with fewer resources.

The methodology for this study was comprised of two phases. Phase I analyzed the per pupil expenditures of Nevada elementary schools over a three-year period and developed descriptive statistics that revealed the expenditure patterns by category. Phase II …

Capitalization Structure: The Effects Of Leverage On Growth Prospects, Laura Cawley, Roers Janku

Renée Crown University Honors Thesis Projects - All

In this paper we quantitatively analyzed capital structure to lead to an understanding of the effects of debt within capital structure. Utilizing EBITDA growth as a proxy for the effects of leverage, we quantitatively analyzed the impact of the capitalization decision. Through the use of a model we analyzed 180 companies to come to conclusions about the EBITDA growth rate necessary as determined by leverage.

Demand Shifting Across Flights And Airports In A Spatial Competition Model, Diego Escobari, Sang-Yeob Lee

School of Economics and Finance Faculty Publications

This paper investigates the nature of day-to-day competition between flights using a unique panel data set on prices and inventories. We use instrumental variables methods and several spatial autoregressive models (SAR) to estimate price reaction functions. The primary source of product differentiation is departure time. After controlling for flight-specific characteristics and various sources of price dispersion, we find important evidence of demand shifting between competing flights. Most of the shift is being captured by flights scheduled to depart within a 3-hour window. We find no evidence of demand shifting between airports.

The Greek Financial Crisis: An Overview Of The Crisis In Entirety And Proposed Measures: Recommended Solutions And Results, Androniki Podaras

Honors College Theses

This paper examines the Greek financial crisis from 2009 in entirety and analyzes the best option for economic growth from this point forth. The history and culture of Greece is discussed, along with a background of the economy and several economic policies that led to the increased debt levels and the poor economic health of the country. The Gross Domestic Product of Greece and the inflation levels are analyzed to show the changes and signs of poor economic health, and one that was affected by the entry into the Eurozone in 2000.

Then, I discuss how this led to the …

Too Big Not To Fail: United States Corporate Media And The 2008 Financial Crisis, Justin Lars Bergh

Graduate Theses and Dissertations

This thesis investigates United States newspaper coverage of the 2008 financial crisis, with a particular focus on the debate that took place in press coverage surrounding the proposed 700 billion dollar Troubled Asset Relief Program (TARP). Specifically, this study aims to understand how, when faced with a crisis that threatened hegemony, the state and economic elites, working in and through media, were able to effectively convince the subordinate classes to consent to state intervention aimed at perpetuating a financial system that has historically profited from the relative financial insecurity of the subordinate classes. In order to understand media's role in …

Out Of Sight, Out Of Mind: The Value Of Political Connections In Social Networks, Quoc-Anh Do, Yen Teik Lee, Bang Dang Nguyen, Kieu-Trang Nguyen

Research Collection School Of Economics

This paper investigates the impact of social-network based political connections on firm value. We focus on the networks of university classmates and alumni among directors of U.S. public firms and congressmen. Comparing firms connected to elected versus defeated politicians in the Regression Discontinuity Design of close elections from 2000 to 2008, we provide evidence that political connections enhance firm value. However, the value of political connections varies in a more complex way than expected. While connections to powerful members of the Senate generate strong positive impact on firm value, connections to newly elected congressmen are less valuable to firms than …

Off The Cliff And Back? Credit Conditions And International Trade During The Global Financial Crisis, Davin Chor, Manova Kalina

Research Collection School Of Economics

We examine the collapse of international trade flows during the 2008-2009 global financial crisis using detailed data on the evolution of monthly U.S. imports over the November 2006 - April 2009 period. We show that credit constraints and the reduction in the availability of external capital were an important channel through which the crisis affected trade volumes. We identify the effects of credit tightening by exploiting the variation in the cost of capital across countries and over time, as well as the variation in financial dependence across sectors. We find that countries with higher interbank interest rates and thus tighter …

Is Analyst Over Optimism Creating Price Inefficiency In The Stock Market?, Juan Mauricio Guiliani

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

This study aims to uncover the relationship between market frictions, measured by price delay, and consensus analyst recommendations on stocks. Analyst recommendations are publicly available to investors, and under the framework of the Efficient Market Hypothesis, should contribute to the efficiency of a stock’s pricing mechanism by providing information to the market that would otherwise not be available. We find evidence that the more favorable recommended stocks in our sample command a higher price delay than less favorably recommended stocks. In other words, the most optimistically recommended stocks are priced less efficiently than other less favorably recommended stocks. We also …

Opaqueness Of Financial Institutions, Todd G. Griffith

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

Spectators and professionals have targeted financial institutions as being at the epicenter of recent markets crises The opaqueness of bank holding companies' assets has been assumed to have created additional volatility and inefficiency within the market. It appears that the capital structure of a bank is the actual driving force behind the inefficiency. I conduct multiple empirical analyses to measure whether the lack to financial institutions asset transparency negatively impacts the ability of the firms price to respond to informational innovations in a timely manner. Through additional econometric tests, I explore several economic theories to narrow in on the root …

Options Vs. Futures: Which On Average Will Have The Greater Payoff?, Ryan Silvester

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

The use and idea of futures contracts has been around for almost as long as humans have existed. Many of these contracts can be as simple as the shaking of someone’s hand with the agreement to trade an asset for an agreed upon price in the future. These contracts have often been used by farmers to ensure a needed price for an asset, or for a store owner to ensure a needed asset for a given price. The idea of a futures contract is to either buy or sell an asset later on at a specified price. In this paper …

How Are Interest Rates Affecting Household Consumption And Savings?, Lacy Christensen

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

This paper explores the optimal interest rates that could potentially maximize overall consumption and savings. I attempt to determine whether artificially low interest rates are positively or negatively affecting consumption. There has been speculation on whether the United States needs to raise the effective federal funds rate to provide financial institutions the incentive to lend money and increase household consumption. The Federal Reserve is currently keeping the effective funds rate between 0 and .25 in hopes of increasing consumption levels. This paper uses fifty years of interest rate data to narrow in on an optimal interest rate that leads to …

The Household's Savings And The Industrial Production : A Time Series Analysis For Poland, Michal Wojewodzki

Lingnan Journal of Banking, Finance and Economics

In this paper the author will examine the short and long-run causality between the growth rate of households‟ savings in the consolidated banking system in Poland, and the Polish economic growth rate (using the industrial production index as its proxy). This research paper will cover Poland‟s economic development over the periods 1997 to 2010 (in a quarterly approach). The main purpose of this paper is to shed light on the direction of the causality between saving and growth, so that the Polish policymakers can either focus on policies promoting growth or focus on saving policies in order to effectively and …

A Quantitative Study Of Influential Factors On Hibor Under Hong Kong's Linked Exchange Rate System, Jianbin Situ

Lingnan Journal of Banking, Finance and Economics

Hong Kong Inter-Bank Offered Rate (HIBOR) is one of the most important interest rates in the Hong Kong money market. This paper studied some of the significant factors in determining HIBOR under Hong Kong‟s Linked Exchange Rate System using a VAR model to describe how various factors affect the movement of HIBOR. The result indicates that HIBOR, foreign exchange rate and M1 are correlated.

Herding Evidence In Chinese Stock Market : A Study Of The Relationship Between Stock Price Index And Trading Volume Based On Behavioral Finance Theory, Xiaofeng Zhao

Lingnan Journal of Banking, Finance and Economics

Over the last couple decades, more evidence has been found supporting the notion that investors are not always rational. Herding behaviors have been observed in both the stock market crash1 and financial bubbles2, which were beyond the understanding of modern finance theory. In this paper, the herding phenomenon was explored in the Chinese stock market by the study of the relationship between stock prices and trading volume over the past 7 years. It was found that the change of price is statistically significant to have caused the change of trading volume, but the reverse is not true. Theoretically, this identifies …

Analysis On Accrual-Based Models In Detecting Earnings Management, Tianran Chen

Lingnan Journal of Banking, Finance and Economics

This paper analyzes the problems with the alternative accrual-based models in detecting earnings management. The researcher will focus on comparing the Jones Model and the Modified Jones Model, which are the two most frequently used model in empirical analysis nowadays. Earnings management is a kind of management which uses accounting techniques to meet the executives‟ needs for earnings; it is a widely debated topic, hence it is worth looking at. Experts and professionals in this area found many approaches to detect the earnings management; within these approaches are the accrual-based models which include the modified Jones model, which currently is …