...Finance 560 Securities Analysis Course Project: Stock Analysis – Cisco Systems, Inc. (CSCO) Company’s Summary Cisco Systems, Inc. designs, manufactures, and sells Internet protocol (IP)-based networking and other products related to the communications and information technology industry worldwide. It offers routers that interconnects public and private IP networks for mobile, data, voice, and video applications; switching products, which provide connectivity to end users, workstations, IP phones, access points, and servers; application networking services; and home networking products, such as adapters, gateways, modems, and home network management software. The company also offers security products comprising span firewall, intrusion prevention, remote access, virtual private network, unified client, Web, and email security and network security products; storage area networking products for data center environments that deliver connectivity between servers and storage systems; collaboration products to integrate voice, video, data, and mobile applications on fixed and mobile networks; video connected home products, including digital video distribution systems and digital interactive set-top boxes; and wireless systems. In addition, it provides optical networking products, Cisco TelePresence systems, Cisco Unified Computing Systems, physical security and video surveillances, and digital media systems. Further, the company offers technical support services; and responsive...
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...Finance Analysis Paper Yahoo! Finance Yahoo! Finance is a service from Yahoo that provides financial information in various ways including stock quotes, corporate press releases, financial reports, stock exchange rates as well as popular message boards for discussing a company's forecasts and stock valuations. It holds the title for the top financial news and research website in the United States, with an astounding 23 million visitors in February 2010. It also offers tools for personal finance management. Yahoo! Finance includes similar portals identified to diverse large countries in South America, Europe, and Asia. Yahoo! is one remarkable website that is not only a favorable site for people linked with finance but is fairly easy to navigate. Anyone from experts who are tech-savvy to beginners who are just exploring the world of technology will able to find the most up to date and beneficial information regarding finance and investment with this website. There are many practical tools such as currency calculators, and a finance glossy that will help you uncover the world of finance and even personal investments you may be interested in. This site offers information in personal finance, latest news and of course investing. These sections are then sub-divided into additional categories that will help fulfill your curiosity in finance. Beginners especially will be excited to learn and understand the concepts of the finance market more properly. A few helpful sections beginners...
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...com/contact-us/ ) Feel Free to Search your Class through Our Product Categories or From Our Search Bar (http://hwguiders.com/ ) Finance System including circulation for money, grant of credit, investment opportunities, and banking faculties Without finance, there would be no resource allocations for operating or functional expenditures. Efficient market Efficient market, information is simultaneously available with corresponding funds example – stock market To make intellectual and well-intended fiscal decisions, information pertaining to funds must be readily accessible and available to provide insight and information for clients/investors/brokers. Primary market A market where the security is purchased directly from the issuer by the investor The primary market allows companies to offer bonds and stock to the public for the first time. It is closely related to the secondary market dependent upon one another to be most effective. Secondary market The transactions of stock from investors and dealers without the involvement of the company This market allows for the trading and selling of shares in stock. Without this market, the stock market would not exist. Once again it is dependent on the primary market. Risk The possibility of losing value towards investments Any investment incurs some risk for example of the stock crashes or market value declines. FIN 370 Week 1 Individual Assignment Defining Financial Terms Get Tutorial by Clicking on the...
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...From Efficient Markets Theory to Behavioral Finance 1. What does Shiller mean by Behavioral Finance? Behavioral Finance is the collaboration between finance and other social sciences. This field of research is focused on determining the precise degree to which various market forces—including rational analysis of company-specific and macroeconomic fundamentals; human and social psychology; and cultural trends—influence investors’ expectations and determine their level of confidence or fear. Behaviorists believe that at times, the real determinants of stock market movements are the forces of human and cultural psychology, oranimal spirits (a term coined by economist John Maynar 2. How does Behavioral Finance contrast with Efficient Market Theory? Behavioral finance takes issue with two crucial implications of the EMH: (1) that the majority of investors make rational decisions based on available information; and (2) that the market price is always right. Behaviorists believe that numerous factors—irrational as well as rational—drive investor behavior. In sharp contrast to efficient markets theorists, behaviorists believe that investors frequently make irrational decisions and that the market price is not always a fair estimate of the underlying fundamental value. Still, many proponents of behavioral finance agree with at least one implication of the efficient market theory—that it’s not possible to reliably earn abnormal returns. 3. What prediction does Efficient...
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...|Shleifer (2000) |Two major foundation of behavioral finance: | | |Limited arbitrage | | |Investor sentiment | |Shleifer (2000) |Investor sentiment is mainly driven by two phenomena: | | |The tendency of people to view events as representative of some specific | | |class and ignore the laws of probability in the process | | |And conservatism. | |Lee, Shleifer & Thaler (1991) |CEFD suggest that as the discount increase, retail investor sentiment | | |decrease. | |Barber, Odean and Zhu(2006) |Stocks heavily bought by individual investors one week earn stronger | | ...
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...[pic] Ecole Supérieure Libre des Sciences Commerciales Appliquées Review of Literature Behavioral Finance Presented to Dr. Mohamed EL-Hennawy Group Assignment Prepared By Albert Naguib Noha Samir Wael Shams EL-Din Moshira Gamil Marie Zarif January 2012 | TABLE OF CONTENTS | | | |List of Table………………………………………………………………………….. | |List of Figure ………………………………………………………………………… | |List of Abbreviations/Acronyms ……………………………………………………. | |Introduction……………………………………………………………………….. | |2. Appearance of Behavioral Finance…………………………………………………… | |2.1. Important Contributors…………………………………………………. ………. | |3. Behavioral Biases…………………………………………………………………… ...
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...ABSTRACT Behavioural finance is part of finance that seeks to understand and explain the systematic financial market implications of psychological decision processes. It utilizes knowledge of cognitive psychology, social sciences and anthropology to explain irrational investor behavior that is not being captured by the traditional rational based models. INTRODUCTION Classical investment theories are based on the assumption that investors always act in a manner that maximizes their return. Yet a number of research show that investors are not always so rational. Human become puzzled when the uncertainty regarding investment decision engulfs them. People are not always rational and markets are not always efficient. Behavioral finance explains why individual do not always make the decisions they are expected to make and why markets do not reliably behave as they are expected to behave. Recent research shows that the average investors make decisions based on emotion, not logic; most investor’s buy high on speculations and sale low on panic mood. Psychological studies reveal that the pain of losing money from investment is really three times greater than the joy of earning money. Emotions such as fear and greed often play a pivotal role in investor’s decision; there are also other causes of irrational behavior. It is observed that stock price moves up and down on a daily basis without any change in fundamental of economies. It is also observed that people in the stock market move in...
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...regarding its debt/equity mix, currencies of denomination, maturity structure, method of financing investment projects, and hedging decisions with a goal of maximizing the value of the firm to some set of stockholders. Definition of Key Terms Capitalization: The total dollar market value of all of a company's outstanding shares. Capital structure: Refers to the way a corporation finances its assets through equity and long-term debt. Financial structure: The structure of a company's sources of financing, including shareholders' equity, long- and short-term debt, and accounts payable. Research Problem The financial markets in emerging markets have undergone considerable growth in recent times, mainly as a result of the trade and financial liberalization policies adopted by these countries over the past decade (Agarwal and Mohtadi, 2004). This development has expanded the financing options available to firms, but raises the important policy question of how financial market development affect the financial policies of these firms. Research Question How does the stock market development affect the Corporate...
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...Efficient Market Discussion and Understanding of Finance As the 2013 Nobel Laureates in economic science, both of Eugene Fama, from the University of Chicago and Robert Shiller, from Yale University, have made famous contribution to the finance world. Even though their views toward market efficiency seem mutually contradictory, their theories has been highly valued by the finance academia as well as industry. This paper compares and contrasts the work of both of them and discusses how their work influence my understanding of finance. Fama is known for his work in initiating and developing the “efficient market hypothesis (EMH).” In his paper, Fama defines “efficient market” as “a market in which prices always fully reflect available information” (Fama 1970). If prices did reflect all available information, trading rules and fundamental analysis would not help investors to constantly earn abnormal return. This proposition has been checked by others and himself in the following papers: "Random Walks in Stock Market Prices (Fama 1965)," and "Filter Rules and Stock Market Trading Profits" (Blume, Fama 1966). Stock prices react to new information so quickly that it is almost impossible to trade on that piece of new information and profit from it. Furthermore, investors cannot earn abnormal returns without taking more systematic risk. To address the different types of information that stock prices could reflect, Fama prosed three types of market efficiency: (1) strong-form, where...
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...FINANCIAL TERMS AND ROLES 1. Finance is a large amount of money which is managed by large business and government institutions . 2. Efficient market is a type of market in finance where relevant information is necessary when a price responds to change, an example is stock markets. 3. Primary market is where securities are created, which are bought and sold. These securities help to gain money and secure the finances in the business. 4. Secondary market is traded among investors. The benefit of secondary market is a debt paying ability. 5. A risk in finance can be a lost of all or some in investment. To determine if a government institution or a company is in a risk, is measured by calculating the standard deviation of the historical returns or average returns of a certain investment, and the highest standard of deviation indicates a higher risk. 6. There are two different types of securities in finance which are debt securities and equity securities. Examples of debt securities are government bonds, corporate bonds, CD’s, and proffered stock. Examples of equity securities are usually ownership such as common stock and preferred stock. 7. Stock in finance can reference to common stock and preferred stock. 8. If debt is longer than 10 years it is called a bond, and it is sold to the capital market. Bonds have fix interest, where the interest never changes. 9. Capital in finance is when a company uses debit equity into assets. 10. Debt is...
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...Vol. 14, No. 1, 2007, 12–29 doi: 10.1111/j.1468-036X.2007.00415.x Behavioural Finance: A Review and Synthesis Avanidhar Subrahmanyam Anderson Graduate School of Management, University of California at Los Angeles, USA E-mail: subra@anderson.ucla.edu Abstract I provide a synthesis of the Behavioural finance literature over the past two decades. I review the literature in three parts, namely, (i) empirical and theoretical analyses of patterns in the cross-section of average stock returns, (ii) studies on trading activity, and (iii) research in corporate finance. Behavioural finance is an exciting new field because it presents a number of normative implications for both individual investors and CEOs. The papers reviewed here allow us to learn more about these specific implications. Keywords: behavioural finance, market efficiency, cross-section of stock returns JEL classifications: G00, G10, G11, G14, G31, G32, G34 1. Introduction The field of finance, until recently, had the following central paradigms: (i) portfolio allocation based on expected return and risk (ii) risk-based asset pricing models such as the CAPM and other similar frameworks, (iii) the pricing of contingent claims, and (iv) the Miller-Modigliani theorem and its augmentation by the theory of agency. These economic ideas were all derived from investor rationality. While these approaches revolutionised the study of finance and brought rigour into the field, many lacunae were left outstanding by the theories...
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...Sample Essay on FINANCE: How to calculate the return on an investment (ROI) Research Paper Example of Research Paper, Sample essay Without calculating the return on an investment (ROI) is not possible to realize any marketing activity and be sure not to loose capital investments. It is essential for making one’s marketing activity more effective and uniquely productive. ROI can be expressed for different time periods: one year, one month, one week, one day. This makes it a necessary objective analyst of the marketing activity even for a long period. It also includes possible fees and expenses of the future financial project. When a person realizes an investment there is always a potential to increase the capital in several ways. There are a lot of formulas made to calculate ROI. Some of them are more detailed, some are less. It is obvious that the formula required depends on the type of investment and that ROI does not yield to formalization and cannot be entirely universal. Nevertheless, a general formula can be given: The Return on an Investment (ROI) Calculation ROI= Profit/ Total investment Total investment - total investment, including all the possible fees and expenses connected with the investment. For example, if you bought $8700 worth of stock and your fees were $1300, then your total investment is $10,000 ($8700 + $1300). Profit - profit or loss associated with the investment. For example if the $10,000 investment in stocks is worth $50,000 one year later, then...
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...Financial Terms and Roles Joy Cobb October 19, 2012 FIN 370 Amy Grover In finance there are many terms that one has to know and understand in order to know what to do. Some terms are more important than others and some you need to know in order to have an understanding of the basics of finance. Some of the important terms are finance, efficient market, primary market, secondary market, risk, security, stock, bonds, capital, debit, yield, return on investment, and cash flow. If you want to be in the business work of finance, or in the business world in general one must know and come to understand these terms. Finance According to dictionary.com finance is the management of revenues; the conduct or transaction of money matters generally, especially those affecting the public, as in the fields of banking and investment. Finance in general is how companies and people manage their money. ("Dictionary", n.d.). Efficient Market According to investopedia market efficiency championed in the efficient market hypothesis (EMH) formulated on a particular stock and or bond market. Thus, according to the EMH, no investor has an advantage in predicting a return on a stock price because no one has access to information not already available to everyone else. ("Investopedia", 2012). Primary Market Investopedia defines primary market as a market that issues new securities on an exchange. Underwriting groups, which consist of investment banks that will set...
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...Financial Terms and Roles Joy Cobb October 19, 2012 FIN 370 Amy Grover In finance there are many terms that one has to know and understand in order to know what to do. Some terms are more important than others and some you need to know in order to have an understanding of the basics of finance. Some of the important terms are finance, efficient market, primary market, secondary market, risk, security, stock, bonds, capital, debit, yield, return on investment, and cash flow. If you want to be in the business work of finance, or in the business world in general one must know and come to understand these terms. Finance According to dictionary.com finance is the management of revenues; the conduct or transaction of money matters generally, especially those affecting the public, as in the fields of banking and investment. Finance in general is how companies and people manage their money. ("Dictionary", n.d.). Efficient Market According to investopedia market efficiency championed in the efficient market hypothesis (EMH) formulated on a particular stock and or bond market. Thus, according to the EMH, no investor has an advantage in predicting a return on a stock price because no one has access to information not already available to everyone else. ("Investopedia", 2012). Primary Market Investopedia defines primary market as a market that issues new securities on an exchange. Underwriting groups, which consist of investment banks that will set...
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...Foundations of Finance: The Capital Asset Pricing Model (CAPM) Prof. Alex Shapiro Lecture Notes 9 The Capital Asset Pricing Model (CAPM) I. II. III. IV. V. VI. Readings and Suggested Practice Problems Introduction: from Assumptions to Implications The Market Portfolio Assumptions Underlying the CAPM Portfolio Choice in the CAPM World The Risk-Return Tradeoff for Individual Stocks VII. The CML and SML VIII. “Overpricing”/“Underpricing” and the SML IX. X. Uses of CAPM in Corporate Finance Additional Readings Equilibrium Process, Supply Equals Demand, Market Price of Risk, Cross-Section of Expected Returns, Risk Adjusted Expected Returns, Net Present Value and Cost of Equity Capital. Buzz Words: 1 Foundations of Finance: The Capital Asset Pricing Model (CAPM) I. Readings and Suggested Practice Problems BKM, Chapter 9, Sections 2-4. Suggested Problems, Chapter 9: 2, 4, 5, 13, 14, 15 Web: Visit www.morningstar.com, select a fund (e.g., Vanguard 500 Index VFINX), click on Risk Measures, and in the Modern Portfolio Theory Statistics section, view the beta. II. Introduction: from Assumptions to Implications A. Economic Equilibrium 1. Equilibrium analysis (unlike index models) Assume economic behavior of individuals. Then, draw conclusions about overall market prices, quantities, returns. 2. The CAPM is based on equilibrium analysis Problems: – – There are many “dubious” assumptions. The main implication of the CAPM concerns expected returns...
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