Matching Items (30)
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- All Subjects: Finance
- Creators: Department of Economics
- Creators: Budolfson, Arthur
Description
This paper provides evidence through an event study, portfolio simulation, and regression analysis that insider trading, when appropriately aggregated, has predictive power for abnormal risk-adjusted returns on some country and sector exchange traded funds (ETFs). I examine ETFs because of their broad scope and liquidity. ETF markets are relatively efficient and, thus, the effects I document are unlikely to appear in ETF markets. My evidence that aggregated insider trading predicts abnormal returns in some ETFs suggests that aggregated insider trading is likely to have predictive power for financial assets traded in less efficient markets. My analysis depends on specialized insider trading data covering 88 countries is generously provided by 2iQ.
ContributorsKerker, Mackenzie Alan (Author) / Coles, Jeffrey (Thesis director) / Mcauley, Daniel (Committee member) / Licon, Wendell (Committee member) / Barrett, The Honors College (Contributor) / Department of Economics (Contributor) / School of Mathematical and Statistical Sciences (Contributor) / Department of Finance (Contributor)
Created2014-05
Description
The current model of revenue generation for some free to play video games is preventing the companies controlling them from growing, but with a few changes in approach these issues could be alleviated. A new style of video games, called a MOBA (Massive Online Battle Arena) has emerged in the past few years bringing with it a new style of generating wealth. Contrary to past gaming models, where users must either purchase the game outright, view advertisements, or purchase items to gain a competitive advantage, MOBAs require no payment of any kind. These are free to play computer games that provides users with all the tools necessary to compete with anyone free of charge; no advantages can be purchased in this game. This leaves the only way for users to provide money to the company through optional purchases of purely aesthetic items, only to be purchased if the buyer wishes to see their character in a different set of attire. The genre’s best in show—called League of Legends, or LOL—has spearheaded this method of revenue-generation. Fortunately for LOL, its level of popularity has reached levels never seen in video games: the world championships had more viewers than game 7 of the NBA Finals (Dorsey). The player base alone is enough to keep the company afloat currently, but the fact that they only convert 3.75% of the players into revenue is alarming. Each player brings the company an average of $1.32, or 30% of what some other free to play games earn per user (Comparing MMO). It is this low per player income that has caused Riot Games, the developer of LOL, to state that their e-sports division is not currently profitable. To resolve this issue, LOL must take on a more aggressive marketing plan. Advertisements for the NBA Finals cost $460,000 for 30 seconds, and LOL should aim for ads in this range (Lombardo). With an average of 3 million people logged on at any time, 90% of the players being male and 85% being between the ages of 16 and 30, advertising via this game would appeal to many companies, making a deal easy to strike (LOL infographic 2012). The idea also appeals to players: 81% of players surveyed said that an advertisement on the client that allows for the option to place an order would improve or not impact their experience. Moving forward with this, the gaming client would be updated to contain both an option to order pizza and an advertisement for Mountain Dew. This type of advertising was determined based on community responses through a sequence of survey questions. These small adjustments to the game would allow LOL to generate enough income for Riot Games to expand into other areas of the e-sports industry.
ContributorsSeip, Patrick (Co-author) / Zhao, BoNing (Co-author) / Kashiwagi, Dean (Thesis director) / Kashiwagi, Jacob (Committee member) / Barrett, The Honors College (Contributor) / Sandra Day O'Connor College of Law (Contributor) / Department of Economics (Contributor) / Department of Supply Chain Management (Contributor)
Created2015-05
Description
This paper intends to inform the reader about the current state of crowdfunding, also known as crowdsourced funding, as of early May 2014. Crowdfunding has proven to be an interesting alternate to other more common financing vehicles with its ability to unite people over common ideas and projects without requiring the contribution of large amounts of capital. Further, the changing legal landscape invites a new era of deregulation that makes crowdfunding easier than ever before. This paper contains explanations of the different types of crowdfunding, platforms (websites), and the international landscape particularly of the US and Europe as well as statistics regarding the predicted future growth of the industry.
ContributorsMurphy, Kevin Edward (Author) / Budolfson, Arthur (Thesis director) / Schein, Stephen (Committee member) / Barrett, The Honors College (Contributor) / Department of Finance (Contributor)
Created2014-05
Description
Over the course of six months, we have worked in partnership with Arizona State University and a leading producer of semiconductor chips in the United States market (referred to as the "Company"), lending our skills in finance, statistics, model building, and external insight. We attempt to design models that help predict how much time it takes to implement a cost-saving project. These projects had previously been considered only on the merit of cost savings, but with an added dimension of time, we hope to forecast time according to a number of variables. With such a forecast, we can then apply it to an expense project prioritization model which relates time and cost savings together, compares many different projects simultaneously, and returns a series of present value calculations over different ranges of time. The goal is twofold: assist with an accurate prediction of a project's time to implementation, and provide a basis to compare different projects based on their present values, ultimately helping to reduce the Company's manufacturing costs and improve gross margins. We believe this approach, and the research found toward this goal, is most valuable for the Company. Two coaches from the Company have provided assistance and clarified our questions when necessary throughout our research. In this paper, we begin by defining the problem, setting an objective, and establishing a checklist to monitor our progress. Next, our attention shifts to the data: making observations, trimming the dataset, framing and scoping the variables to be used for the analysis portion of the paper. Before creating a hypothesis, we perform a preliminary statistical analysis of certain individual variables to enrich our variable selection process. After the hypothesis, we run multiple linear regressions with project duration as the dependent variable. After regression analysis and a test for robustness, we shift our focus to an intuitive model based on rules of thumb. We relate these models to an expense project prioritization tool developed using Microsoft Excel software. Our deliverables to the Company come in the form of (1) a rules of thumb intuitive model and (2) an expense project prioritization tool.
ContributorsAl-Assi, Hashim (Co-author) / Chiang, Robert (Co-author) / Liu, Andrew (Co-author) / Ludwick, David (Co-author) / Simonson, Mark (Thesis director) / Hertzel, Michael (Committee member) / Barrett, The Honors College (Contributor) / Department of Information Systems (Contributor) / Department of Finance (Contributor) / Department of Economics (Contributor) / Department of Supply Chain Management (Contributor) / School of Accountancy (Contributor) / School of Mathematical and Statistical Sciences (Contributor) / Mechanical and Aerospace Engineering Program (Contributor) / WPC Graduate Programs (Contributor)
Created2015-05
Description
This paper classifies private equity groups (PEGs) seeking to engage in public to private transactions (PTPs) and determines (primarily through an examination of the implied merger arbitrage spread), whether certain reputational factors associated with the private equity industry affect a firm's ability to acquire a publicly-traded company. We use a sample of 1,027 US-based take private transactions announced between January 5, 2009 and August 2, 2018, where 333 transactions consist of private-equity led take-privates, to investigate how merger arbitrage spreads, offer premiums, and deal closure are impacted based on PEG- and PTP-specific input variables. We find that the merger arbitrage spread of PEG-backed deals are 2-3% wider than strategic deals, hostile deals have a greater merger arbitrage spread, larger bid premiums widen spreads and markets accurately identify deals that will close through a narrower spread. PEG deals offer lower premiums, as well as friendly deals and larger deals. Offer premiums are 8.2% larger among deals that eventually consummate. In a logistic regression, we identified that PEG deals are less likely to close than strategic deals, however friendly deals are much more likely to close and Mega Funds are more likely to consummate deals among their PEG peers. These findings support previous research on PTP deals. The insignificance of PEG-classified variables on arbitrage spreads and premiums suggest that investors do not differentiate PEG-backed deals by PEG due to most PEGs equal ability to raise competitive financing. However, Mega Funds are more likely to close deals, and thus, we identify that merger arbitrage spreads should be narrower among this PEG classification.
ContributorsSliwicki, Austin James (Co-author) / Schifman, Eli (Co-author) / Simonson, Mark (Thesis director) / Hertzel, Michael (Committee member) / Department of Economics (Contributor) / School of Accountancy (Contributor) / Barrett, The Honors College (Contributor)
Created2019-05
Description
This paper investigates whether measures of investor sentiment can be used to predict future total returns of the S&P 500 index. Rolling regressions and other statistical techniques are used to determine which indicators contain the most predictive information and which time horizons' returns are "easiest" to predict in a three year data set. The five "most predictive" indicators are used to predict 180 calendar day future returns of the market and simulated investment of hypothetical accounts is conducted in an independent six year data set based on the rolling regression future return predictions. Some indicators, most notably the VIX index, appear to contain predictive information which led to out-performance of the accounts that invested based on the rolling regression model's predictions.
ContributorsDundas, Matthew William (Author) / Boggess, May (Thesis director) / Budolfson, Arthur (Committee member) / Hedegaard, Esben (Committee member) / Barrett, The Honors College (Contributor) / School of Mathematical and Statistical Sciences (Contributor) / Department of Finance (Contributor)
Created2013-12
Description
The goal of this thesis is to motivate college students to be financially aware and drive them toward attainable financial goals and freedom through budgeting. By providing a foundation of financial knowledge, they can begin to make intelligent decisions about their purchases. After they learn about their current spending habits, students can soundly determine what they have monetarily and then how to allocate that money appropriately. The paper outlines different categories these students should focus on fiscally, like rent and housing as the largest expenses and entertainment expenses as a common pitfall in a college student's budget. Constant financial awareness is reiterated throughout, indicating this is a day-to-day skill to develop. The thesis finally ties up with discussing financing options for college and life in general, with student loans, credit cards, and savings.
ContributorsSchachte, Jessica Linn (Author) / Budolfson, Arthur (Thesis director) / Hoffman, David (Committee member) / Barrett, The Honors College (Contributor) / Department of Finance (Contributor)
Created2013-12
Description
This thesis provides an in-depth comparison of the attractiveness of leveraged buyout (LBO) transactions under low versus high interest rates. In particular, our analysis focuses on how London Interbank Offered Rates (LIBOR) affect internal rates of return for hypothetical LBO transactions, assuming financing structure and operational enhancements for the individual transactions are held constant. Given that LIBOR rates are currently at historically low levels, we model four hypothetical LBO transactions in the specialty retail space using both historically high and currently low LIBOR rates (for a total of eight model outputs). We quantify the extent to which high rates have the potential to decrease LBO value, while low rates may enhance value. Through this thesis, we have obtained a better understanding of LBO transaction modeling, an understanding that will make us more effective as professionals in investment banking. Finally, this thesis can serve as a step-by-step guide to LBOs for undergraduate finance students, particularly for members of the Investment Banking Industry Scholars (IBIS) program at Arizona State University.
ContributorsGormley, Sean (Co-author) / Hert, James (Co-author) / Coles, Jeffrey (Thesis director) / Bhattacharya, Anand (Committee member) / Barrett, The Honors College (Contributor) / Department of Economics (Contributor) / Department of Finance (Contributor) / School of Accountancy (Contributor)
Created2014-05
Description
Are there measurable differences between the human capital of the refugee children born inside and outside of the United States? If so, does the amount of time spent abroad before immigrating matter, and can we get an idea of what happens to this gap over time? Looking at the Children of Immigrants Longitudinal Study (CILS) 1991-2006, I examine standardized test scores and other indicators of performance of young Indochinese refugees and immigrants. This study finds evidence for a negative correlation between being born abroad and performance in selected metrics at the time of early adolescence. This is extended into a negative relationship between the lengths of time abroad before coming to the United States (age of arrival) and those same metrics. However, this study finds signs that this gap in human capital is at least partly bridged by the time of early adulthood. It remains unclear though, whether this possible catch up is reflected in other early adult outcomes such as household income.
ContributorsWatterson, Christen Brock (Author) / Schoellman, Todd (Thesis director) / Leiva Bertran, Fernando (Committee member) / Department of Economics (Contributor) / W. P. Carey School of Business (Contributor) / Barrett, The Honors College (Contributor)
Created2016-05
Description
This paper takes a look at developing a technological start up revolving around the world of health and fitness. The entire process is documented, starting from the ideation phase, and continuing on to product testing and market research. The research done focuses on identifying a target market for a 24/7 fitness service that connects clients with personal trainers. It is a good study on the steps needed in creating a business, and serves as a learning tool for how to bring a product to market.
ContributorsHeck, Kyle (Co-author) / Mitchell, Jake (Co-author) / Korczynski, Brian (Co-author) / Peck, Sidnee (Thesis director) / Eaton, John (Committee member) / Barrett, The Honors College (Contributor) / Department of Finance (Contributor) / Department of Economics (Contributor) / Department of Management (Contributor) / Department of Psychology (Contributor) / Department of Supply Chain Management (Contributor) / School of Accountancy (Contributor) / W. P. Carey School of Business (Contributor)
Created2014-05