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The Lehman Brothers Bankruptcy A: Overview, Rosalind Z. Wiggins, Thomas Piontek, Andrew Metrick 2019 Yale Program on Financial Stability, Yale School of Management

The Lehman Brothers Bankruptcy A: Overview, Rosalind Z. Wiggins, Thomas Piontek, Andrew Metrick

Journal of Financial Crises

On September 15, 2008, Lehman Brothers Holdings, Inc., the fourth-largest U.S. investment bank, sought Chapter 11 protection, initiating the largest bankruptcy proceeding in U.S. history. The demise of the 164-year old firm was a seminal event in the global financial crisis. Under the direction of its long-time Chief Executive Officer Richard Fuld, Lehman had been very successful pursuing a high-leverage, high-risk business model that required it to daily raise billions of dollars to fund its operations. Beginning in 2006, Lehman began to invest aggressively in real-estate-related assets and soon had significant exposures to housing and subprime mortgages, just ...


The New Titans Of Wall Street: A Theoretical Framework For Passive Investors, Jill E. Fisch, Asaf Hamdani, Steven Davidoff Solomon 2019 University of Pennsylvania Law School

The New Titans Of Wall Street: A Theoretical Framework For Passive Investors, Jill E. Fisch, Asaf Hamdani, Steven Davidoff Solomon

Faculty Scholarship at Penn Law

Passive investors — ETFs and index funds — are the most important development in modern day capital markets, dictating trillions of dollars in capital flows and increasingly owning much of corporate America. Neither the business model of passive funds, nor the way that they engage with their portfolio companies, however, is well understood, and misperceptions of both have led some commentators to call for passive investors to be subject to increased regulation and even disenfranchisement. Specifically, this literature takes a narrow view both of the market in which passive investors compete to manage customer funds and of passive investors’ participation in the ...


Accounting Education In Greece During The Gfc (2009-2016), Dimitrios V. Siskos 2019 Embry-Riddle Aeronautical University

Accounting Education In Greece During The Gfc (2009-2016), Dimitrios V. Siskos

Publications

The structure of accounting education in Greece, and in the world, is facing nowadays many significant challenges since the global financial crisis has left behind many critical educational burdens. At the same time, there is an increase in accounting omissions and malpractices of ethics both in the public and in the private sector of Greece. These undoubtedly contributed to massive unemployment, high poverty rate, crime and other social ills experienced in the country. This motivated the study on restructuring accounting education by devising a new educational framework that can be applied to Greek universities and colleges with the purpose of ...


Option Strangles: An Analysis Of Selling Equity Insurance, Clemens Kownatzki, Hisam Sabouni 2019 Pepperdine University

Option Strangles: An Analysis Of Selling Equity Insurance, Clemens Kownatzki, Hisam Sabouni

Graziadio Working Paper Series

Our results suggest, selling SPY strangles are generally profitable across a variety of widths. However, the payoff profile of a short option strangle exposes the contract seller to a potential for unlimited losses. Our evidence on maximum drawdowns indicates that losses on some positions can be the equivalent of the profits gained on approximately forty prior positions. This payoff profile has given rise to the metaphor of selling option contracts as the equivalent of “picking up nickels in front of a steam roller.” The goal of our paper is to analyze the full return characteristics of option strangles and to ...


Making Consumer Finance Work, Natasha Sarin 2019 University of Pennsylvania Law School

Making Consumer Finance Work, Natasha Sarin

Faculty Scholarship at Penn Law

The financial crisis exposed major faultlines in banking and financial markets more broadly. Policymakers responded with far-reaching regulation that created a new agency—the CFPB—and changed the structure and function of these markets.

Consumer advocates cheered reforms as welfare-enhancing, while the financial sector declared that consumers would be harmed by interventions. With a decade of data now available, this Article presents the first empirical examination of the successes and failures of the consumer finance reform agenda. Specifically, I marshal data from every zip code and bank in the United States to test the efficacy of three of the most ...


Global Standards For Securities Holding Infrastructures: A Soft Law/Fintech Model For Reform, Charles W. Mooney Jr. 2019 University of Pennsylvania Law School

Global Standards For Securities Holding Infrastructures: A Soft Law/Fintech Model For Reform, Charles W. Mooney Jr.

Faculty Scholarship at Penn Law

Intermediaries such as stockbrokers and banks are ubiquitous in global securities markets, playing essential roles in markets, including trading, settling trades, and post-settlement holding of securities. This essay focuses in particular on the roles of intermediaries in securities holding systems. It proposes an IOSCO-led “soft-law-to-hard-law” approach to the development of Global Standards for reforms to these holding systems. States would be expected to adopt “hard law” reforms through statutory and regulatory adjustments to securities holding systems. The reforms would embrace not only important standards of a functional and regulatory nature, but also holistic standards relating to the private law, insolvency ...


The Fork In The Road Revisited: An Attempt To Overcome The Clash Between Formalistic And Pragmatic Approaches, Markus A. Petsche 2019 Department of Legal Studies of Central European University

The Fork In The Road Revisited: An Attempt To Overcome The Clash Between Formalistic And Pragmatic Approaches, Markus A. Petsche

Washington University Global Studies Law Review

This article revisits one of the most controversial issues of international investment law, namely the question of the effect of fork-in- the-road (FITR) clauses contained in investment treaties. It provides a comprehensive and detailed examination of the relevant arbitral case law, highlighting the co-existence of two formalistic approaches (based respectively on the distinction between treaty and contract claims and the lis pendens-related triple-identity test) with the more pragmatic fundamental-basis test established by the ICSID tribunal in Pantechniki v. Albanania and subsequently endorsed in H&H v. Egypt. This contribution critically examines these two strands of case law, emphasizing both the ...


Why China Had To “Ban” Cryptocurrency But The U.S. Did Not: A Comparative Analysis Of Regulations On Crypto-Markets Between The U.S. And China, Rain Xie 2019 Washington University School of Law

Why China Had To “Ban” Cryptocurrency But The U.S. Did Not: A Comparative Analysis Of Regulations On Crypto-Markets Between The U.S. And China, Rain Xie

Washington University Global Studies Law Review

The cryptocurrency market grew from a $1.5 billion market capitalization in early 2013 to over $795 billion in January 2018. Bitcoin, an exemplar cryptocurrency, gained value from $0.08 before 2010 to over $17,000 per bitcoin in December 2017. While cryptocurrencies have campaigned for revolutionizing financial transactions, the crypto-market is plagued by nefarious minds, fleecing investors in frauds and Ponzi schemes. This crypto-mania therefore presents numerous legal and regulatory challenges that demand prompt and efficient responses. Nevertheless, the decentralized, anonymous nature of cryptocurrencies magnifies these challenges and has constantly outpaced the law’s ability to respond. To understand ...


The Gettysburg Economic Review, Volume 11, Spring 2019, 2019 Gettysburg College

The Gettysburg Economic Review, Volume 11, Spring 2019

Gettysburg Economic Review

No abstract provided.


Are Price-Earnings Ratios Mean Reverting? An Empirical Study, Kevin Klassen 2019 Gettysburg College

Are Price-Earnings Ratios Mean Reverting? An Empirical Study, Kevin Klassen

Gettysburg Economic Review

Mean reversion in stock prices is a highly studied area in the financial literature with controversial findings. While some economists have found evidence of mean reverting processes in stock prices, many argue in favor of the Efficient Market Hypothesis which states stock prices are random walk processes. This paper seeks to add to the literature on mean reversion but testing for evidence in price-earnings ratios rather than stock prices. The study employs a robust regression model controlling for company-specific and general market factors that influence price-earnings ratio deviations. After correcting for heteroskedasticity, serial correlation, and unit root processes, the results ...


Circadian Variations And Risky Decision Making, Sana Sra 2019 Claremont Colleges

Circadian Variations And Risky Decision Making, Sana Sra

Scripps Senior Theses

Over the past decades, decision making under risk has garnered a great amount of attention both in the field of economics and psychology. Although state-dependent variabilities of risk taking are well-documented, little is known about the effects of a person’s preferred time of day, or chronotype, in risky decision making. Under circumstances of circadian mismatch (e.g., when an “early bird” makes decisions in the evening), research suggests that decision making may reflect a greater reliance on heuristics, such as using stereotypes in social judgments. However, the effects of circadian mismatch on heuristics in risky decision making are relatively ...


Study Of The Impact Of The Great Recession On The Relation Between Earnings Surprises And Stock Returns, Benjamin Anderson, Stoyu Ivanov 2019 San Jose State University

Study Of The Impact Of The Great Recession On The Relation Between Earnings Surprises And Stock Returns, Benjamin Anderson, Stoyu Ivanov

Faculty Publications

This paper examines the impact of the Great Recession on the relation between earnings surprises and stock returns and examines the role that informed and uninformed investors play in the formation of the post-earnings announcement drift (PEAD). We use quarterly earnings surprises (SUE), firms' standardized unexpected returns, calculated as actual earnings minus expected earnings, scaled by stock price one day prior to the earnings announcement, and one-year future stock returns, the subsequent twelve-month abnormal stock returns, calculated as the difference between the firm's buy-and-hold return and the value-weighted market buy-and-hold return, to test whether the Great Recession had an ...


Relationship Between Financial Markets And Natural Disasters In The Us, Esteban Giraldo 2019 Rhode Island College

Relationship Between Financial Markets And Natural Disasters In The Us, Esteban Giraldo

Honors Projects Overview

The objective of this study is to find out how different sectors of the market, as defined by the Bloomberg Industry Classification Standard (BICS), react before and after different natural disasters, such as hurricanes, earthquakes and tornados. Public cross sectional and time series data from NOAA, Unisys Weather, and the USGS were collected, in order to build a data set that could be used for this study. OLS regressions, as well as fixed effects regressions were used to achieve the results. Among the major findings is a highly significant upward reaction in the returns of the energy sector when property ...


Understanding Heterogeneous Board Busyness: Determinants And Implications, Tongqing Ding 2019 University of Colorado at Boulder

Understanding Heterogeneous Board Busyness: Determinants And Implications, Tongqing Ding

Accounting Graduate Theses & Dissertations

I examine the determinants and consequences of board busyness. Regarding determinants, I find that board busyness decreases with firms’ monitoring demand and increases with their advising demand. I also find that agency problems and labor market frictions are associated with greater board busyness. Further, firms with high advising and low monitoring demands tend to adopt more lenient policies governing director busyness. To examine implications, I separate board busyness into the demand-based component (explained by firms’ combined advising and monitoring demand), the overboarding component (explained by agency problems and labor market frictions), and the remaining unexplained component. I find consistently positive ...


Talking About Regulation In 10-K Annual Reports; Uniformity In A Naive Sample., Katerina Ruth Mills 2019 University of Colorado at Boulder

Talking About Regulation In 10-K Annual Reports; Uniformity In A Naive Sample., Katerina Ruth Mills

Finance Graduate Theses & Dissertations

This project seeks to highlight the difficulties of employing required annual reports in analyses attempting to tie left-hand side outcomes, whether past or future, through the use of Natural Language Processing techniques to analyze firm discussion of regulators, regulation, laws, and other regulatory regimes in the context of required 10-K annual disclosures under U.S. public company reporting regimes governed by the U.S. Securities and Exchange Commission (SEC). While Natural Language Processing (NLP) techniques have gained popularity in turning text into data facilitating a multitude of varied new analytical projects in the fields of academic corporate research, using NLP ...


Leveraged Buyouts: The Predictive Power Of Target Firm Characteristics, Yutao (James) Jiang 2019 Claremont McKenna College

Leveraged Buyouts: The Predictive Power Of Target Firm Characteristics, Yutao (James) Jiang

CMC Senior Theses

This paper utilizes a hazard model to predict the probability of leveraged buyout transactions for public firms. Rather than testing specific hypotheses, this paper incorporates all plausible predictors identified in existing literature to better delineate the effects of different characteristics. Largely confirming past results, I find that LBO transactions are more likely to occur for companies with more stable cash flows, less market visibility, lower market valuation, lower ownership concentration and lower costs of financial distress. By including LBO transactions from 1980 to September 2018, I find preliminary evidence that since the financial crisis of 2008 – 2009, private equity firms ...


M&A Performance: Market’S Initial Reaction As An Unbiased Indicator Of Post-Acquisition Performance, Nikolaos Papageorgiou 2019 Claremont Colleges

M&A Performance: Market’S Initial Reaction As An Unbiased Indicator Of Post-Acquisition Performance, Nikolaos Papageorgiou

CMC Senior Theses

This paper investigates the reliability of the stock market’s initial reaction to M&A announcements as a predictor of actual post-acquisition performance. The two prevailing methods for evaluating M&A performance are event studies (stock market-based measures) and accounting-based measures. The present study combines these two performance evaluation approaches in a single empirical examination. Both the post-merger buy-and-hold abnormal returns and changes in ROA are used as actual post-acquisition performance variables. The acquirer’s cumulative abnormal return (CAR) around the announcement is used as the market predictor variable. An econometric model is employed to test the predictive power of ...


What Do We Know About The Recent Performance Of Indian Banks?, Laira Aggarwal 2019 Claremont McKenna College

What Do We Know About The Recent Performance Of Indian Banks?, Laira Aggarwal

CMC Senior Theses

This paper examines the performance of Indian banks by studying the effects of recent reforms and macroeconomic events. Indian banks went through a period of reforms in the past twenty years. The impact of these reforms and major macroeconomic events has been examined using time-series analysis. Event studies offer additional perspective on the short-run effect of the events on different types of Indian banks. Although, the event dates are not all statistically significant in the time-series regressions, the demonetization of 2016 is significant in the event study analysis. Thus, while reforms and events have immediate impact on the performance of ...


Modeling Returns On Carbon Emission Allowances: An Application To Rggi, James Keneally 2019 Claremont Colleges

Modeling Returns On Carbon Emission Allowances: An Application To Rggi, James Keneally

CMC Senior Theses

This thesis attempts to model the returns on Regional Greenhouse Gas Initiative (RGGI) allowances using logged monthly returns from 2011-2018. This asset, shown to be a useful diversifier in portfolios, has been identified by previous literature to behave similarly to commodities. I used auto-regressive, GARCH, and Markov regime switching models to analyze the returns because the returns displayed changing volatility. These models were comparatively analyzed both in and out-of-sample. In this limited data analysis, the Markov model outperformed both alternatives in-sample. The Markov and Garch models displayed similar predictive power out-of-sample, however neither were particularly effective.


Are Cds Auctions The Tail Wagging The Dog? An Empirical Study Of Corporate Bond Return Volatility At The Time Of Default, Jennifer Mace 2019 Claremont Colleges

Are Cds Auctions The Tail Wagging The Dog? An Empirical Study Of Corporate Bond Return Volatility At The Time Of Default, Jennifer Mace

CMC Senior Theses

Over the past decade, numerous engineered credit events and cases of market participants manipulating bond prices to influence Credit Default Swap (CDS) auction payouts have occurred. These cases have become increasingly common, and the CFTC has stated they may constitute market manipulation and undermine not only the CDS market but also the credit derivative and default markets. Although there is a plethora of news and media coverage on publicized cases, there is no previous empirical research on evidence of these practices. This paper is motivated by the desire to determine if there is indirect evidence of bond price manipulation around ...


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