Abstract This paper talks about dividendgrowthmodels, in particular the Gordon Growthmodel and the assumptions that one needs to take in the calculations. The paper includes the characteristics and limitations of dividendgrowthmodels and talks about CAPM, or the capital asset pricing model, which is based on three main parameters: the risk - free rate, the stock's beta coefficient and the expected rate of return for the market as a whole, used to calculate the market risk premium. The author compares the two models and explains why the modern portfolio theory is base on CAPM notions.
From the Paper "On the other hand, the CAPM is an easy to use and implement model, based on three main parameters: the risk - free rate, the stock's beta coefficient and the expected rate of return for the market as a whole, used to calculate the market risk premium. The model has a large applicability, mainly because it does not use dividend estimates for the future and thus works for organizations that do not pay regular dividends, but also because information on the three variables mentioned are usually public and thus one does not need to make additional estimates on the variables used. "
Tags:dividendgrowthmodels. growthrates, Modern Portfolio Theory
Abstract This paper shows that Japan, Hong Kong, Singapore, Taiwan and Korea have been identified as the five best performing Asian economies, having grown twice as fast as other East Asian economies since the 1960's ? 1980?s. This essay identifies and discusses a range of reasons for the rapid economic growthrates of the economies of these countries. Arguments are supported by statements by different economists and statistical tables.
From the Paper "At the end of World War II, Japan, South Korea, Taiwan, Hong Kong and Singapore were war-shattered, largely resource-poor areas with rapidly growing populations and very low living standards. By the 1980s, Japan had become one of the world's richest countries and the others had achieved or were approaching income levels of developed nations (FCJ Editors, 1998). South Korea has jumped from being a developing nation to the status of advanced industrial nation. South Korea and Taiwan have recently made the leap to democracy. Hong Kong, probably the most freewheeling economic region in the world, was incorporated into the People's Republic of China on July 1, 1997. Singapore is an economic leader of all of South East Asia."
This paper examines the financial development of the Italian economy and measures its effects on its economic growth and compares it to the U.S. financial market.
Abstract The following paper compares the GDP growthrates of Italy and the U.S. measures the level of financial development made by both the markets. Finally it examines whether the economy making higher growth with respect to financial development has made higher economic growth. The reason for choosing the Italian economy for comparison is that it is a lesser developed financial market as compared to the United States.
From the Paper "There has been a lot of research already done on the issue of identifying a relationship between financial development and economic growth. The questions like does financial development spurs economic growth" To what extent does higher growth induce a reduction in the incidence of poverty? What can financial development contribute in reducing poverty? are continuously part of the economists debate. Generally it is believed that Economic growth is simply the result of refraining from current consumption. Within an economy, there are two general types of commodities. One are the consumption goods and the others are the capital goods. The consumption goods are for the purpose of general consumers use while capital goods are used for production of other commodities. When in an economy there is a lesser consumption of consumption goods by the households, a considerable part of the income is not spent and the result is in the form of positive net savings.?
Abstract This is a paper discussing the history of China since the communist revolution focusing on economics, economic growth, the change to capitalism and the current and future prospects for the economy
From the Paper "Decades of isolation central planning and socialism caused China's economy to stagnate while Japan and other Asian nations' economies flourished. After Mao's successor Deng Xiaoping gradually introduced market-oriented reforms and decentralized economic decision making ..."
Abstract This paper explains that the primary factor affecting the exchange rate of a country adopting a floating exchange rate regime is the supply and demand of the respective currency on the international market. The paper then goes on to discuss the various factors that make the demand and supply vary, thus affecting the exchange.
From the Paper "In the respective announcement, the public found out that the US economy had produced only 21,000 new jobs and none in the private sector, from the 150,000 that had been predicted previously. The signal this send the investors was quite clear: the US economy is not performing as well as we may have thought, it is not producing new workplaces (which would be a sign of rising business, as new employees would be needed). The subsequent devaluation of the US dollar was a natural psychological reaction from the investors."
Abstract In this article, the writer notes that stock buy-backs and one-time special dividends have accounted for sixty-three percent of total dividends of companies in the United Kingdom since 2003. The writer notes that ordinary dividendgrowth has failed to keep pace with earnings growth in the United Kingdom as well as the rest of Europe. The writer discusses that while one would not expect this to be necessarily bad news for the investor, European companies have discovered that their buy-back and special dividend preferences in recent years have failed to boost companies' share prices. As a result, they are now turning back to increasing dividends as the preferred way to return capital to investors This paper discuses the advantages and disadvantages of stock buybacks and dividends so that stockholders can make more informed investment decisions.
Outline:
Introduction
Stock Buybacks
Stock Buyback Advantages
Stock Buyback Disadvantages
Dividends Advantages of Dividends Disadvantages of Dividends Recommendations
From the Paper "Stock buybacks improve a firm's financial ratio. Although a stock buyback reduces cash, return on assets increases because the cash component of assets on the balance sheet is reduced. Return on equity increases because there is less outstanding equity. The buyback also helps to improve the company's price-earnings ratio due to the reduction in outstanding share. All of these metrics, particularly the price-earnings ratio, are considered important metrics to judge investment in a company and their improved positions due to the stock buyback may lead to additional stock demand/appreciation. In addition, stock buybacks send a strong signal to the market that a firm's management believes the shares are undervalued."
Abstract The paper discusses how dividends are often viewed as a measure of a company's financial and operational stability, with dividendgrowth an indication of success and dividend decline an indication of financial trouble. The paper then explains that in as much as dividend policy is viewed in certain ways by the market, for management it is viewed as a way to send signals to the market. The paper looks at the reasons why a company would not pay dividends and discusses the different ways in which a company can pay out a dividend.
From the Paper "Companies pay out dividends for a few different reasons. The first is that the income stream helps to attract investors. Theoretically, the value of a company's stock is the net present value of all future cash flows, and dividends are those cash flows. In practice, investors also seek capital gains, but the income stream from dividends remains attractive in that it provides a degree of certainty with regards to the future cash flows.
"The degree of certainty is provided by the fact that dividends are often viewed as a measure of a company's financial and operational stability. A company typically only decides to pay dividends once it achieves stability. Moreover, once a dividend is set, companies are reticent to decrease that dividend because such a move will cause the stock value to fall, reducing the firm's attractiveness to investors. So not only does the presence of a dividend indicate a degree of stability, but dividend growth does as well; and a decline in dividends is viewed as being indicative of financial trouble."
Abstract This paper investigates whether and how the federal income tax receipts change given the overall tax rate for individual income taxes. The paper also investigates whether the tax receipts exhibit a diminishing return as marginal tax rates increase. The paper concludes that there exists a meaningful relationship between the marginal income tax rate and the marginal income tax receipts.
Outline
Introduction
Model Model Results
Initial Model Alternative Model Alternate Model End Notes
Initial and Alternative Model Results
Data Mining
Data Mining Results
Conclusion
Appendix A: Figures
Appendix B: Data Sources
From the Paper "Now, disregarding all the statistical minutia that may or may not be relevant the author will make the following observations regarding the alternate model. This model is depicting the predictive power of the variance of the marginal individual income tax rates among all five income quintiles to the income tax receipts at the federal level. It is apparent from the model that nearly a quarter of the variation in the marginal tax receipts can be predicted through the marginal tax rate, ceteris paribus."
Abstract This paper explains that the goal of its thesis is to conceive a model to manage the global interest rate risk of the commercial portfolio in order to determine the optimal structure of the new production and to test the tool on the Credit Foncier de Monaco, private banking and subsidiary of Calyon, which is obviously the investment banking of Credit Agricole. The paper's thesis is divided into two main sections: the theoretical modeling and the empirical application.
Table of Contents:
Abstract
Abbreviations
Introduction
Theoretical Modeling Identification
Interest Rate Nominal vs. Real Rate Fixed vs. Variable Interest Rate Short-Term vs Long-Term Rates Spot vs. Forward Rates Term Structure of Interests
Theories
Methods
Deterministic and Stochastic Models Sources of Interest Rate Risk
Repricing or Maturity Mismatch Risk
Basis or Bid-Ask Spread Risk
Yield Curve Risk
Options Risk
Interest Rate Exposure
Net and Gross Positions
Balance-Sheet & Gap
Profit and Loss Statement and Spread
Factors
Measurement
Volume
Instantaneous Gaps
Generalized Gaps
Indexed Gaps
Simulated Gaps
Value
Duration
Convexity
Market
Margin
Sensitivity
Modified Duration and Relative Convexity
Money Markets Rates Management
Hedging And Speculation
Micro or Macro Hedging
Systematic or Selective Hedging
Partial and Total Speculation
Hedging Risk and Opportunity Cost
Passive and Active Hedging
Passive Hedging or Beta Management
Active Hedging or Alpha Management
Instruments
Spot
Forward And Future
Fra And Swaps
Options
Modeling Utility
Structure
Utility Function
Constraints
Regulation
Commercial
Model Objective Function
Efficient Portfolio
Optimal Portfolio
Empirical Application
Presentation
Cfm
Treasury
Asset-Liability Management (Alm) Committee
Adaptation
Structure
Constraints
Rates Simulation
Leverage
Regulatory Constraints
Variance-Covariance Matrix
Utility
Variances
Conclusion
Glossary
Appendix: Balance-Sheet + Profit & Loss Statement
Appendix: Balance-Sheets by Currency, Maturity and Interest Rate Appendix: Gaps
Appendix: Correlation and Variance-Covariance Matrix
Appendix: Weightings and Balance-Sheets in March 2008
Appendix: Coefficients of Variation
Appendix: Objective Function for Different Aversions to Risk
From the Paper "Taking into account the stock and constraints, the model determines the optimal allocation of the production for different scenarios of rates level, rates volatility and risk aversion degrees. The bank hedges against the interest rate risk by optimally adjusting its production.
"The optimal portfolio is the tangent point between the efficient frontier and the indifferent curve. It is obtained by equalizing the marginal rate of transformation (MRT) to the risk to return, which is the slope of the efficient frontier, and the marginal rate of substitution (MRS) to the risk to return, which is the slope of the objective function."
Tags: tool transformation, tangent point, risk premium, asset management
Abstract This paper examines the elements that determine why some developing countries have managed to achieve higher rates of economic growth in the post-Second World War period while others have stagnated in comparison. The paper tests several theoretical frameworks and models developed in order to see if these can explain the differences, and if not, why not.
Tags: globalization, economic growth, Kenya, Malaysia, developing nation, capitalism
Compares the covered-uncovered interest rate parity of the U.S. dollar and the Swiss franc including the programming routines, algorithms and applications in MATLAB, RATS and EVIEWS.
Abstract This paper examines the covered and uncovered interest parity between U.S. dollar and Swiss franc by first using simple summary statistics for the spot and forward rates as the mean, kurtosis, skewness and standard deviation. The paper then presents the covered interest and uncovered parity hypothesis and applies tests to examine its validation, as deviations from covered interest parity, regression analysis, threshold autoregression and exponential transition autoregression. Based on this extensive research, the paper rejects these covered and uncovered interest parity hypotheses.
Table of Contents:
Introduction
Literature Review
Data
Summary Statistics
Random Walk
Unit Root and Stationary Tests
Covered Interest Rate Parity
Linear Tests
Non Linear Tests 1
Threshold Autoregressive (TAR) Models Smoothing Transition Autoregressive (STAR) Models Uncovered Interest Rate Parity
Vector Error-Equilibrium Correction Model (VECM)
Impulse Responses
Threshold Vector Error Correction Model Dynamic OLS (DOLS)
Conclusions
Appendix: Program Procedure Routine for TSAY Test of TAR Nonlinearities in winRATS 6.0
Appendix: Program Procedure Routine for AR(1)-TAR Estimation in winRATS 6.0
Appendix: Test for Linearity against ESTAR and LSTAR and Secification Test between ESTAR and LSTAR selection in winRATS 6.0
Appendix: Program Procedure Routine for AR(1)-LSTAR-GARCH(1,1) Estimation in Eviews 6.0
Appendix: Program Procedure Routine for AR(1)-LSTAR-OLS Estimation in Eviews 6.0
Appendix: Program Procedure Routine for AR(1)-ESTAR-OLS Estimation in Eviews 6.0
Appendix: A Different Procedure Routinefor AR(1)-ESTAR-OLS Estimation in Eviews 6.0
Appendix: MATLAB Routines for Grid Search and STAR Estimation
Instructions
MATLAB Routine for Grid Search on STAR Models MATLAB Routine for STAR Models Estimation with Various Methods
From the Paper "Descriptive statistics for the spot and three-monthly and six-monthly forward exchange rates returns are reported in table 1. We observe that in all cases negative mean returns are observed, but one might say that are very close to zero. Also in both three rates returns negative skewness is presented, but kurtosis is very close to three, as is defined by the normal distribution. Based on the Jarque-Bera statistics the hypothesis of normality for spot and forward exchange rates is not rejected."
The paper examines the economies of Australia and the United States and compares the economic growth, inflation rates and unemployment rates of the two countries
Abstract The writer of this paper seeks to compare and contrast the economic growth, unemployment and/or inflation of two or more countries to each other. With this in mind, the paper's author compares and contrasts Australia and the United States in relation to economic growth, inflation and unemployment rates. The paper's writer first presents an overview of the two economies before comparing and contrasting them. The paper is accompanied by a number of graphs.
Outline:
Introduction
Overview Of Australia's Economy
Overview Of U.S. Economy
Unemployment Rates & Inflation Rates Compared And Contrasted
Summary
Bibliography
From the Paper "Because employment rates do impact inflationary rates during times of change and in times specifically when unemployment rates rise it is necessary specifically during these times to inform the public through clear policy and expectations as to what is expected thereby cushioning the shock of the impacts of unemployment on inflation rates. There has however, been research reviewed in this study that shows that use of an inflation target is most useful to understand when lower of prices can result in a benefit to levels of employment."
Abstract This paper explains that investors in the stock market keep track of a variety of measures and benchmarks for determining value and for choosing what stock to buy and when to sell. The author notes that investors can gain value not merely from selling their stock but from earning dividends. The paper relates that the traditional fundamental strategy is to think of oneself not as a purchaser of shares of stock, but as a purchaser of companies.
From the Paper "Investors in the stock market keep track of a variety of measures and benchmarks for determining value and for choosing what stock to buy and when to sell. Investors can gain value not merely from selling their stock but from earning dividends, and this raises the question of what may be the relationship between stock price and dividends paid. Jeremy J. Siegel notes that the price of stock is like any other financial asset in that it "equals the present value of the expected stream of future cash payments to the owner," which themselves are uncertain and are "subject to the earnings of the firm": The uncertainty contrasts sharply with cash payments to bondholders, the value of which is fixed by contractual obligation."
Abstract This paper seeks to explore the crack growth fracture mechanics with a focus on the factors that influence the fatigue crack growthrate and how the Paris-Erdogan equation can be used to predict fatigue crack growth as well as in the calculation of crack growthrate. The paper also presents research on modes of mechanical failure.
From the Paper "According to Hancock, G. J. (2003, p.125), fracture mechanics is used to predict the effect of cracks on the durability and integrity of structures and components. It helps in detecting cracks in structure before a crack grows to significant length as a result of sustained stress cycles. During fatigue, crack growth rate can be calculated by the Paris-Erdogan equation given by da/dn = C (Δk)n where a represents the crack length, n represents the number of fatigue cycles, Δk represents the applied stress intensity factor range while c and m are considered to be constants of a material. Δk increases with time as a load is applied due to the growth of the crack. For a crack of length a, the rate of crack growth given by da/dn per cycle varies with Δk. Where c and m are constant with m between 2 and 4. The upper limit of a crack growth rate curve represents the fracture toughness of the material while the lower limit is the threshold. There is characterization of sub-critical crack growth using linear plastic fracture mechanics parameters and acoustic emission data to predict crack propagation rates. This determines the number of cycles required for an existing crack to attain a substantial size. (Reuter, W. G, Robert, S. P. 2002, p.458)Acoustic emissions are elastic stress waves generated by a rapid release of energy from a localized source within a stressed material. Fatigue crack growth rate is influenced by many factors some of which include: notch radius where research indicates presence of higher fatigue crack growth rate in a blunt notch. This is because of accumulation of fatigue damage at the tip of the notch initiating the crack a head of the notch. Material strength, initial crack tip condition, mean stress, overload as well as non-proportional load determine the crack growth rate. Research has also shown that ferroelectric ceramics experience cracking and mechanical degradation when subjected to large alternating electric fields. (Anderson, T.L., 2005, p.455)"
Abstract It outlines the development of genetically modified organisms (GMOs) that have an accelerated growthrate and produce a higher yield faster. The focus is on salmon, trout and catfish. Their development is outlined and their growthrates are compared to those of comparable species.
