Research in International Business and Finance 29 (2013) 14–34 Contents lists available at SciVerse ScienceDirect Research in International Business and Finance j o ur na l h om ep ag e: w w w . e l s e v i e r . c o m / l o c a t e / r i b a f Does good governance matter to debtholders? Evidence from the credit ratings of Japanese firms Hiroyuki Aman a‚1‚ Pascal Nguyen b‚∗ a School of Business Administration‚ Kwansei Gakuin University‚ Uegahara‚ Nishinomiya‚ Hyogo 662-8501‚ Japan
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Italy. After using an event study methodology to assess the direct impact of War events on the five selected markets‚ we extensively analyse the correlation between these markets. Since cross-market correlation coefficients are conditional on market volatility‚ tests for market interdependence based on these coefficients are inaccurate due to heteroskedasticity. Therefore‚ during crises when markets are more volatile‚ like during the Iraq War‚ estimates of correlation coefficients tend to increase and
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0925 | Annual Mean | 0.4671 | Annual SD | 0.3204 | 5. Standard deviation (volatility) on the x-axis and average return on the y-axis Solution: 6. What do you notice about the volatilities of the individual stocks‚ compared to the volatility of the equally weighted portfolio? Solution: The volatilities of the individual stocks are mostly bigger than the volatility of the equally weighted portfolio that implies the portfolio tends to have more stability
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oil and equity prices for asset allocation. We develop a time-varying Bayesian Dynamic Conditional Correlation model for volatilities and correlations and find that joint modelling commodity and equity prices produces more accurate point and density forecasts‚ which lead to substantial benefits in portfolio allocation. This‚ however‚ comes at the price of higher portfolio volatility. Therefore‚ the popular view that commodities are to be included in one’s portfolio as a hedging device is
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economic era in the decades leading up to the global financial crisis (1970-2008) left many economists and academics in state of disbelief regarding market volatility and informed incorrect perceptions of risk. The era’s nickname was coined by Federal Reserve Governor Ben Bernanke who‚ in 2004‚ claimed that the decline in macroeconomic volatility in recent economic history was attributable to structural changes. He credited improvements in the economy’s ability to absorb shocks to changes in economic
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What is GM’s foreign exchange hedging policy? GM’s foreign exchange hedging policy has three primary objectives. Its first objective is to reduce cash flow and earnings volatility. Specifically‚ management hedges the company’s transaction exposures and consciously ignores any balance sheet exposures (translation exposures). Second‚ GM aims to minimize the management time and costs dedicated to global FX management. The company employs a passive FX management strategy since an internal study
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Over the past decade‚ professional managers and hedge funds have grown and become ubiquitous within the investment field. Even with the recent financial downturn and long lasting recession‚ individuals continue to place trust in managers in hopes of attaining a larger return on their investment. Regrettably‚ over this same time period‚ managers have been able to amass great wealth while the individual investor struggles to gain a modest profit. Misaligned incentives as well as informational
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1. Explain why exchange rates have been so volatile in recent years/ What are the implications of this volatility for companies like Billabong? There are a large number of influences at work in the foreign exchange markets. The most obvious are shifts in fundamental demand for a currency that reflects the outlook for the economy. For example‚ if Australia is exporting more goods and services‚ foreign buyers will need to buy Australian dollars to pay for them. That will put upward pressure on the
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SouthAsia Enterprise Development Facility (SEDF) Results of the Banking Survey of the SME Market in Bangladesh Sector Report February 2006 SouthAsia Enterprise Development Facility (SEDF) Results of the Banking Survey of the SME Market in Bangladesh Sector Report February 2006 © PA Knowledge Limited 2006 Prepared for: Prepared by MIDAS PA Consulting Group The Chrysler Building 405 Lexington Avenue New York‚ NY 10174 USA. info@paconsulting.com www.paconsulting.com e.Gen Consultants
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BUFN 762 Fixed Income Securities Final Exam Solution 1. Briefly explain why many corporations prefer to issue callable long-term corporate bonds rather than noncallable long-term bonds. There are three main reasons why a corporation may be interested in calling a bond. * Interest rated have fallen‚ so they can refinance at a lower rate. * Credit quality has improved‚ so they can refinance at a lower rate. * Assets have been sold‚ so money is available to pay off debt.
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