...The international community may have given up on Crimea. It is clear the new government in Kiev has not. Which brings us to the events of today. 'Insults and obscenities' Russian troops fired into air as Ukrainians marched on a Crimean air base The Russian guard at the airfield in Sevastopol must have considered the prospect of a confrontation like this. Marching towards them was a column of 300 unarmed Ukrainian soldiers, with their flag proudly displayed. The Russians fired over their heads but on went the Ukrainians, marching in line, singing their anthem, in defiance. One volley after the other went over their head and, as they neared the barriers, the rifles of the Russian soldiers were lowered. This airfield at Sevastopol is home to the MiG fighters of the Ukrainian air force. For several days the troops loyal to Kiev had been confined to their barracks - but now the Russian and Ukrainian commanders were face to face. The two sides shouted insults and obscenities as the officers tried to calm the situation. The Ukrainian officer was demanding joint patrol of his airfield. His Russian counterpart radioed the demand to his...
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...The basic paradigm of asset pricing is in vibrant f lux. The purely rational approach is being subsumed by a broader approach based upon the psychology of investors. In this approach, security expected returns are determined by both risk and misvaluation. This survey sketches a framework for understanding decision biases, evaluates the a priori arguments and the capital market evidence bearing on the importance of investor psychology for security prices, and reviews recent models. The best plan is . . . to profit by the folly of others. — Pliny the Elder, from John Bartlett, comp. Familiar Quotations, 9th ed. 1901. IN THE MUDDLED DAYS BEFORE THE RISE of modern finance, some otherwisereputable economists, such as Adam Smith, Irving Fisher, John Maynard Keynes, and Harry Markowitz, thought that individual psychology affects prices.1 What if the creators of asset-pricing theory had followed this thread? Picture a school of sociologists at the University of Chicago proposing the Deficient Markets Hypothesis: that prices inaccurately ref lect all available information. A brilliant Stanford psychologist, call him Bill Blunte, invents the Deranged Anticipation and Perception Model ~or DAPM!, in which proxies for market misvaluation are used to predict security returns. Imagine the euphoria when researchers discovered that these mispricing proxies ~such * Hirshleifer is from the Fisher College of Business, The Ohio State University. This survey was written for presentation...
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...AMERICAN UNIVERSITY OF BEIRUT COINTEGRATION BETWEEN MORTGAGE RATES AND HOUSING PRICES: CASE OF THE UNITED STATES by MOHAMAD SAMIR HAMMOUD A project submitted in partial fulfillment of the requirements for the degree of Master of Arts in Financial Economics to the Department of Economics of the Faculty of Arts and Sciences at the American University of Beirut Beirut, Lebanon March 2009 AMERICAN UNIVERSITY OF BEIRUT COINTEGRATION BETWEEN MORTGAGE RATES AND HOUSING PRICES: CASE OF THE UNITED STATES by MOHAMAD SAMIR HAMMOUD Approved by: ______________________________________________________________________ Dr. Simon Neaime, Professor Economics First Reader ______________________________________________________________________ Dr. Marcus Marktanner, Assistant Professor Economics Second Reader Date of project presentation: March 4, 2009 AMERICAN UNIVERSITY OF BEIRUT PROJECT RELEASE FORM I, Mohamad Samir Hammoud authorize the American University of Beirut to supply copies of my project to libraries or individuals upon request. do not authorize the American University of Beirut to supply copies of my project to libraries or individuals for a period of two years starting with the date of the project defense. ____________________ Signature ____________________ Date ACKNOWLEDGMENTS I would like to thank Professor Simon Neaime who directly and indirectly promoted my productivity by making me experience interesting challenges...
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...customers with a poor credit history or no credit history without any security in return of the money lending. Subprime lending encompasses a variety of credit instruments, including subprime mortgages, subprime car loans, and subprime credit cards, among others. A subprime loan is offered at a rate higher than A-paper loans due to the increased risk. Subprime lenders To access this increasing market, lenders often take on risks associated with lending to people with poor credit ratings or limited credit histories. Subprime loans are considered to carry a far greater risk for the lender due to the aforementioned credit risk characteristics of the typical subprime borrower. Lenders use a variety of methods to offset these risks. In the case of many subprime loans, this risk is offset with a higher interest rate or various credit...
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...Volume 10, Issue 3 Fall 2010 No Double Dip On July 5th, 6th, and very early on the 7th of this year, I engaged in 70 minutes of rigorous stationary biking, a full cycle of weightlifting, and my daily stretching regimen. Oh sure, I had some hip pain and a sore knee, but at age 59, I was rocking and rolling. In this regard, I was not unlike the U.S. economy in 2005-April 2007, which was doing great in spite of some fundamental problems. Then in the course of a few hours on July 7th, I was unable to walk more than a few steps after having a hip replaced. Just like the U.S. economy in late 2008, my infirmity had taken me down a few notches! My subsequent recovery was remarkably similar to that facing the U.S. economy: a satisfactory recovery to unremarkable mediocrity. As I describe my recovery, bear in mind that the U.S. economy shed 8.4 million jobs and 4.1% of GDP in roughly 18 months. This is a lot of economic damage. On July 8th, I was able to walk twice a day for 20 minutes, bearing weight on crutches, lifting light hand weights, and doing simple leg therapy. By July 19th, I did not need any pills or a cane, and was able to walk an hour twice a day at a 23-minute-mile pace. By August 19th, I biked at full resistance for 50 minutes, walked 15-minute-miles for an hour, actively lifted leg weights, Thru Latest Available as of Sept 20, 2010 3.0 $420.5 20.5 1.9 960.1 $418 15.8 6.3 1,458.0 723.0 -50.0 261.0 681.0 15.8 4.5 20.0 93.9 -2.3 2.4 -190.2 $305.1 -$351.9 On the...
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...Lookout Report from S&P Valuation and Risk Strategies Making The Case For Eight Consecutive Quarters Of Double-Digit Earnings Growth Michael Thompson Managing Director Valuation and Risk Strategies (1) 212-438-3480 michael_thompson@standardandpoors.com Robert Keiser Vice President Valuation and Risk Strategies (1) 212-438-3540 robert_keiser@standardandpoors.com Lisa Sanders Director Valuation and Risk Strategies (1) 212-438-3291 lisa_sanders@standardandpoors.com Although less than two weeks old, the third-quarter earnings season is shaping up to be a repeat of the second quarter, already suggesting that reported earnings will not break the seven-quarter streak of double-digit earnings growth. Although they were likely inspired by market concerns of a double-dip recession in the U.S. and threats of contagion stemming from the eurozone debt crisis, analysts may have underestimated the earnings power of U.S. companies. The Valuation and Risk Strategies (VRS) research team continues to expect slow GDP growth in 2011. As we said in the previous issue of the Lookout Report, if third-quarter earnings exceed analyst expectations--as they have for the past two years--we think the case for growth over recession will solidify. Heading into the third quarter, the Capital IQ mean estimate for S&P 500 companies declined sharply, with growth forecasts dropping from 17% at the beginning of the calendar quarter to 12.8% on Oct. 10, the day before Alcoa Inc.'s earnings unofficially launched...
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...A UTH-WE ST MBA series N's CEN G SO ER GE in E conomics Managerial Economics A Problem Solving Approach SECOND EDITION LUKE M. FROEB Vanderbilt University BRIAN T. MC CANN Vanderbilt University Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States Managerial Economics: A Problem Solving Approach, Second Edition Luke M. Froeb, Brian T. McCann Vice President of Editorial, Business: Jack W. Calhoun Vice President/Editor-in-Chief: Joe Sabatino Acquisitions Editor: Michael Worls Developmental Editor: Jean Buttrom Associate Marketing Manager: Betty Jung Content Project Manager: Lindsay Bethoney Media Editor: Deepak Kumar © 2010, 2008 South-Western, Cengage Learning ALL RIGHTS RESERVED. No part of this work covered by the copyright hereon may be reproduced or used in any form or by any means—graphic, electronic, or mechanical, including photocopying, recording, taping, Web distribution, information storage and retrieval systems, or in any other manner—except as may be permitted by the license terms herein. For product information and technology assistance, contact us at Cengage Learning Customer & Sales Support, 1-800-354-9706 For permission to use material from this text or product, submit all requests online at www.cengage.com/permissions Further permissions questions can be emailed to permissionrequest@cengage.com Print Buyer: Sandee Milewski Production Service:...
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...Unemployment From Wikipedia, the free encyclopedia Jump to: navigation, search For payments paid to unemployed people, see unemployment benefits. Unemployed men outside a soup kitchen in Depression-era Chicago, 1931. Unemployment (or joblessness) occurs when people are without work and actively seeking work.[1] The unemployment rate is a measure of the prevalence of unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labor force. During periods of recession, an economy usually experiences a relatively high unemployment rate.[2] According to International Labour Organization report, more than 197 million people globally are out of work or 6% of the world's workforce were without a job in 2012.[3] There remains considerable theoretical debate regarding the causes, consequences and solutions for unemployment. Classical economics, New classical economics, and the Austrian School of economics argue that market mechanisms are reliable means of resolving unemployment. These theories argue against interventions imposed on the labor market from the outside, such as unionization, bureaucratic work rules, minimum wage laws, taxes, and other regulations that they claim discourage the hiring of workers. Keynesian economics emphasizes the cyclical nature of unemployment and recommends government interventions in the economy that it claims will reduce unemployment during recessions. This theory focuses...
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...Kelly | McGowen | Williams C en ga Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States ge Le ar ni ng BUSN BUSN BUSN 6, 6th Edition Kelly | McGowen | Williams © 2014 Cengage Learning. All rights reserved. Senior Project Development Manager: Linda deStefano Market Development Manager: Heather Kramer Senior Production/Manufacturing Manager: Donna M. Brown Production Editorial Manager: Kim Fry Sr. Rights Acquisition Account Manager: Todd Osborne en C Printed in the United States of America ga ge Le Compilation © 2013 Cengage Learning ISBN-13: 978-1-285-88034-1 ISBN-10: 1-285-88034-X Cengage Learning 5191 Natorp Boulevard Mason, Ohio 45040 USA ALL RIGHTS RESERVED. No part of this work covered by the copyright herein LL RIGHT th repro reprodu ted, s may be reproduced, transmitted, stored or used in any form or by any means electro graphic, electronic, or mechanical, including but not limited to photocopying, scann di recording, scanning, digitizing, taping, Web distribution, information networks, a or information storage and retrieval systems, except as permitted under o t Section 107 or 108 of the 1976 United States Copyright Act, without the prior writ written permission of the publisher. pro For product information and technology assistance, contact us at Cen Cengage Learning Customer & Sales Support, 1-800-354-9706 For permission to use material from this text or product, submit...
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...Aswath Damodaran INVESTMENT VALUATION: SECOND EDITION Chapter 1: Introduction to Valuation Chapter 2: Approaches to Valuation Chapter 3: Understanding Financial Statements Chapter 4: The Basics of Risk Chapter 5: Option Pricing Theory and Models Chapter 6: Market Efficiency: Theory and Models Chapter 7: Riskless Rates and Risk Premiums Chapter 8: Estimating Risk Parameters and Costs of Financing Chapter 9: Measuring Earnings Chapter 10: From Earnings to Cash Flows Chapter 11: Estimating Growth Chapter 12: Closure in Valuation: Estimating Terminal Value Chapter 13: Dividend Discount Models Chapter 14: Free Cashflow to Equity Models Chapter 15: Firm Valuation: Cost of Capital and APV Approaches Chapter 16: Estimating Equity Value Per Share Chapter 17: Fundamental Principles of Relative Valuation Chapter 18: Earnings Multiples Chapter 19: Book Value Multiples Chapter 20: Revenue and Sector-Specific Multiples 3 16 37 81 121 152 211 246 311 341 373 425 450 487 533 593 637 659 718 760 Chapter 21: Valuing Financial Service Firms Chapter 22: Valuing Firms with Negative Earnings Chapter 23: Valuing Young and Start-up Firms Chapter 24: Valuing Private Firms Chapter 25: Acquisitions and Takeovers Chapter 26: Valuing Real Estate Chapter 27: Valuing Other Assets Chapter 28: The Option to Delay and Valuation Implications Chapter 29: The Option to Expand and Abandon: Valuation Implications Chapter 30: Valuing Equity in Distressed Firms Chapter 31: Value Enhancement: A Discounted Cashflow...
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...Consulting Editor FINANCIAL MANAGEMENT Adair Excel Applications for Corporate Finance First Edition Block, Hirt, and Danielsen Foundations of Financial Management Fourteenth Edition Brealey, Myers, and Allen Principles of Corporate Finance Tenth Edition Brealey, Myers, and Allen Principles of Corporate Finance, Concise Second Edition Brealey, Myers, and Marcus Fundamentals of Corporate Finance Sixth Edition Brooks FinGame Online 5.0 Bruner Case Studies in Finance: Managing for Corporate Value Creation Sixth Edition Chew The New Corporate Finance: Where Theory Meets Practice Third Edition Cornett, Adair, and Nofsinger Finance: Applications and Theory First Edition Cornett, Adair, and Nofsinger Finance: M Book First Edition DeMello Cases in Finance Second Edition Grinblatt (editor) Stephen A. Ross, Mentor: Influence through Generations Grinblatt and Titman Financial Markets and Corporate Strategy Second Edition Higgins Analysis for Financial Management Ninth Edition Kellison Theory of Interest Third Edition Kester, Ruback, and Tufano Case Problems in Finance Twelfth Edition Ross, Westerfield, and Jaffe Corporate Finance Ninth Edition Ross, Westerfield, Jaffe, and Jordan Corporate Finance: Core Principles and Applications Third Edition Ross, Westerfield, and Jordan Essentials of Corporate Finance Seventh Edition Ross, Westerfield, and Jordan Fundamentals of Corporate Finance Ninth Edition Shefrin Behavioral Corporate Finance: Decisions that Create Value First Edition White Financial...
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...THE GREAT RECESSION Since publication of Robert L. Hetzel’s he Monetary Policy of the Federal Reserve (Cambridge University Press, 2008), the intellectual consensus that had characterized macroeconomics has disappeared. hat consensus emphasized eicient markets, rational expectations, and the eicacy of the price system in assuring macroeconomic stability. he 2008–2009 recession not only destroyed the professional consensus about the kinds of models required to understand cyclical luctuations but also revived the credit-cycle or asset-bubble explanations of recession that dominated thinking in the nineteenth century and irst half of the twentieth century. hese “market-disorder” views emphasize excessive risk taking in inancial markets and the need for government regulation. he present book argues for the alternative “monetary-disorder” view of recessions. A review of cyclical instability over the last two centuries places the 2008–2009 recession in the monetary-disorder tradition, which focuses on the monetary instability created by central banks rather than on a boom-bust cycle in inancial markets. Robert L. Hetzel is Senior Economist and Research Advisor in the Research Department of the Federal Reserve Bank of Richmond, where he participates in debates over monetary policy and prepares the bank’s president for meetings of the Federal Open Market Committee. Dr. Hetzel’s research on monetary policy and the history of central banking has appeared in publications...
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...pResented by the society of ActuARies, the cAsuAlty ActuARiAl society And the cAnAdiAn institute of ActuARies Risk Management: The Current Financial Crisis, Lessons Learned and Future Implications Copyright 2008 by the Society of Actuaries. R I s k M a n a g e M e n T: the current financial crisis, lessons learned and future implications introduction the current financial crisis presents a case study of a “financial tsunami” (as former federal Reserve chairman Alan Greenspan recently called it) on what can go wrong. its ramifications are far-reaching and the lessons learned will be embedded in risk management practices for years to come. As one of the premier enterprise risk professions in practice today, the actuarial profession is sharing its substantial insight into what went wrong and the implications for the future. on behalf of the society of Actuaries, the casualty Actuarial society and the canadian institute of Actuaries, we are pleased to provide a series of essays on Risk Management: The Current Financial Crisis, Lessons Learned and Future Implications. this e-book is the result of a call for essays on the subject coordinated by the following groups: • • • • The Joint Risk Management Section of the Society of Actuaries, Casualty Actuarial Society and Canadian institute of Actuaries The Investment Section of the Society of Actuaries International Network of Actuarial Risk Managers Enterprise Risk Management Institute International ...
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...EXORBITANT PRIVILEGE EXORBITANT PRIVILEGE The Rise and Fall of the Dollar and the Future of the International Monetary System Barry Eichengreen Oxford University Press, Inc., publishes works that further Oxford University’s objective of excellence in research, scholarship, and education. Oxford New York Auckland Cape Town Dar es Salaam Hong Kong Karachi Kuala Lumpur Madrid Melbourne Mexico City Nairobi New Delhi Shanghai Taipei Toronto With offices in Argentina Austria Brazil Chile Czech Republic France Greece Guatemala Hungary Italy Japan Poland Portugal Singapore South Korea Switzerland Thailand Turkey Ukraine Vietnam Copyright © 2011 by Barry Eichengreen Published by Oxford University Press, Inc. 198 Madison Avenue, New York, NY 10016 www.oup.com Oxford is a registered trademark of Oxford University Press All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of Oxford University Press. Library of Congress Cataloging-in-Publication Data Eichengreen, Barry J. Exorbitant privilege : The Rise and Fall of the Dollar and the Future of the International Monetary System / Barry Eichengreen. p. cm. Includes bibliographical references and index. ISBN 978-0-19-975378-9 1. Money—United States—History—20th century. 2. Devaluation of currency—United States—History—21st century. 3. United States—Economic...
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...Enron and World Finance A Case Study in Ethics Edited by Paul H. Dembinski, Carole Lager, Andrew Cornford and Jean-Michel Bonvin Enron and World Finance Also by Observatoire de la Finance From Bretton Woods to Basel Finance & the Common Good/Bien Commun, no. 21, Spring 2005 Ethics of Taxation and Banking Secrecy Finance & the Common Good/Bien Commun, no. 12, Autumn 2002 Will the Euro Shape Europe? Finance & the Common Good/Bien Commun, no. 9, Winter 2001–2 Dommen, E. (ed.) Debt Beyond Contract Finance & the Common Good/Bien Commun, Supplement no. 2, 2001 Bonvin, J.-M. Debt and the Jubilee: Pacing the Economy Finance & the Common Good/Bien Commun, Supplement no. 1, 1999 Dembinski, P. H. (leading contributor) Economic and Financial Globalization: What the Numbers Say United Nations, Geneva, 2003 Enron and World Finance A Case Study in Ethics Edited by Paul H. Dembinski Carole Lager Andrew Cornford and Jean-Michel Bonvin in association with the Observatoire de la Finance Selection, editorial matter and Chapters 1, 2 and 16 © Observatoire de la Finance Remaining chapters © contributors 2006 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence ...
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