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Description
The Covid-19 pandemic has made a significant impact on both the stock market and the<br/>global economy. The resulting volatility in stock prices has provided an opportunity to examine<br/>the Efficient Market Hypothesis. This study aims to gain insights into the efficiency of markets<br/>based on stock price performance in the Covid era. Specifically, it investigates the market’s<br/>ability to anticipate significant events during the Covid-19 timeline beginning November 1, 2019<br/><br/>and ending March 31, 2021. To examine the efficiency of markets, our team created a Stay-at-<br/>Home Portfolio, experiencing economic tailwinds from the Covid lockdowns, and a Pandemic<br/><br/>Loser Portfolio, experiencing economic headwinds from the Covid lockdowns. Cumulative<br/>returns of each portfolio are benchmarked to the cumulative returns of the S&P 500. The results<br/>showed that the Efficient Market Hypothesis is likely to be valid, although a definitive<br/>conclusion cannot be made based on the scope of the analysis. There are recommendations for<br/>further research surrounding key events that may be able to draw a more direct conclusion.
ContributorsBrock, Matt Ian (Co-author) / Beneduce, Trevor (Co-author) / Craig, Nicko (Co-author) / Hertzel, Michael (Thesis director) / Mindlin, Jeff (Committee member) / Department of Finance (Contributor) / Economics Program in CLAS (Contributor) / WPC Graduate Programs (Contributor) / Barrett, The Honors College (Contributor)
Created2021-05
Description
This paper investigates the role of top management and board interlocks between acquirers and targets. I hypothesize that an interlock may exacerbate agency problems due to conflicting interests and lead to value-decreasing acquisition. An interlock may also serve as a conduit of information and personal experience, and reduce the cost of information gathering for both firms. I find supporting evidence for these two non-mutually exclusive hypotheses. Consistent with the agency hypothesis, interlocked acquirers underperform non-interlocked acquirers by 2% during the announcement period. However, well-governed acquirers receive higher announcement returns and have better post-acquisition performance in interlocked deals. The proportional surplus accrued to an acquirer is positively correlated with the interlocking agent's ownership in the acquirer relative to her ownership in the target. Consistent with the information hypothesis, when the target's firm value is opaque, interlocks improve acquirer announcement returns and long-term performance. Interlocked acquirers are also more likely to use equity as payment, especially when the acquirer's stock value is opaque. Target announcement returns are not influenced by the existence of interlock. Finally, I find acquisitions are more likely to occur between two interlocked firms and such deals have a higher completion rate.
ContributorsWu, Qingqing (Author) / Bates, Thomas W. (Thesis advisor) / Hertzel, Michael (Committee member) / Lindsey, Laura (Committee member) / Arizona State University (Publisher)
Created2012
Description
This paper examines how equity analysts' roles as information intermediaries and monitors affect corporate liquidity policy and its associated value of cash, providing new evidence that analysts have a direct impact on corporate liquidity policy. Greater analyst coverage (1) reduces information asymmetry between a firm and outside shareholders and (2) enhances the monitoring process. Consistent with these arguments, analyst coverage increases the value of cash, thereby allowing firms to hold more cash. The cash-to-assets ratio increases by 5.2 percentage points when moving from the bottom analyst-coverage decile to the top decile. The marginal value of $1 of corporate cash holdings is $0.93 for the bottom analyst-coverage decile and $1.83 for the top decile. The positive effects remain robust after a battery of endogeneity checks. I also perform tests employing a unique dataset that consists of public and private firms, as well as a dataset that consists of public firms that have gone private. A public firm with analyst coverage can hold approximately 8% more cash than its private counterpart. These findings constitute new evidence on the real effect of analyst coverage.
ContributorsChang, Ching-Hung (Author) / Bates, Thomas (Thesis advisor) / Bharath, Sreedhar (Committee member) / Lindsey, Laura (Committee member) / Arizona State University (Publisher)
Created2012
Description
In order to discover if Company X's current system of local trucking is the most efficient and cost-effective way to move freight between sites in the Western U.S., we will compare the current system to varying alternatives to see if there are potential avenues for Company X to create or implement an improved cost saving freight movement system.
ContributorsPicone, David (Co-author) / Krueger, Brandon (Co-author) / Harrison, Sarah (Co-author) / Way, Noah (Co-author) / Simonson, Mark (Thesis director) / Hertzel, Michael (Committee member) / Barrett, The Honors College (Contributor) / Department of Supply Chain Management (Contributor) / Department of Finance (Contributor) / Economics Program in CLAS (Contributor) / School of Accountancy (Contributor) / W. P. Carey School of Business (Contributor) / Sandra Day O'Connor College of Law (Contributor)
Created2015-05
DescriptionA group project working to implemented programs in the Town of Gilbert that build an entrepreneurial ecosystem within the town.
ContributorsCarneal, Tracy (Co-author) / Browning, Kelcey (Co-author) / Camoriano, James (Co-author) / Badulescu, Chris (Co-author) / Lindsey, Laura (Thesis director) / Riddel, Dana (Committee member) / Barrett, The Honors College (Contributor) / School of Accountancy (Contributor) / WPC Graduate Programs (Contributor)
Created2014-05
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
A Guide to Financial Mathematics is a comprehensive and easy-to-use study guide for students studying for the one of the first actuarial exams, Exam FM. While there are many resources available to students to study for these exams, this study is free to the students and offers an approach to the material similar to that of which is presented in class at ASU. The guide is available to students and professors in the new Actuarial Science degree program offered by ASU. There are twelve chapters, including financial calculator tips, detailed notes, examples, and practice exercises. Included at the end of the guide is a list of referenced material.
ContributorsDougher, Caroline Marie (Author) / Milovanovic, Jelena (Thesis director) / Boggess, May (Committee member) / Barrett, The Honors College (Contributor) / Department of Information Systems (Contributor) / School of Mathematical and Statistical Sciences (Contributor)
Created2015-05
Description
Abstract: Handling the multiple functions of monetary policy that protect the U.S. economy not only on a short term, but also long-term scale is a complicated responsibility assigned to Federal Reserve, in which their actions present a profound impact on consumer confidence towards financial markets and global economies. Specifically, one of the most important goals of the Federal Reserve is to mitigate the risk of the United States to enter a recession, while maintaining a balanced approach when making those policy decisions. In this thesis, we focus on the monetary policy of the Federal Reserve, particularly, their role in controlling interest rates to prevent recessionary sentiment in the current state of the economy. Since 2008, markets have been stronger and previous policies like Dodd-Frank have ensured that market collapses during the Great Recession do not repeat itself. Yet, fluctuations in the yield curve, polarizing investment views, and unsettled consumer confidence has pointed to another recession in the near future. In this case, we will look at the way the Fed has implemented short term policies to lower this risk in order to fight volatile markets, however, fluctuating interest rates has its consequences. The goal of this thesis is to analyze the various ways the Fed has managed interest rates in the past and present, and further, to offer a framework to serve as the most effective policy to combat volatility and recessionary sentiment in the U.S. economy.
ContributorsPatel, Dylan (Author) / Sacks, Jana (Thesis director) / Simonson, Mark (Committee member) / Economics Program in CLAS (Contributor) / Department of Finance (Contributor) / Barrett, The Honors College (Contributor)
Created2020-05
Description
The purpose of this paper is to study the impact that poison pills have on the value of share prices after the cancellation of a transaction. While various studies have focused on the generic share price impact of poison pills, very few have focused on the impact of poison pills in cancelled transactions. Based on our research and analysis, in cancelled transactions, target firms that have poison pills prior to the transaction and target firms without poison pills generate returns above the announcement date premium and subsequent investment in the S&P 500 when held to the cancellation of the transaction and when held from cancellation to 6 months after the transaction. This analysis can contribute to the argument that holding shares of firms regardless of cancellation risk is preferable to taking profit at announcement date. Additionally, it can contribute to the study of undiscovered pricing impact of poison pills.
ContributorsChotalla, Gurkaran (Co-author) / Amjad, Hamza (Co-author) / Reddy, Samir (Co-author) / Stein, Luke (Thesis director) / Lindsey, Laura (Committee member) / School of Mathematical and Statistical Sciences (Contributor) / Department of Finance (Contributor) / Economics Program in CLAS (Contributor) / Barrett, The Honors College (Contributor)
Created2016-12
Description
Millennial involvement levels in the stock market are startlingly low. But what has caused this disconnect between America's younger generation and the financial sector? Stress from past financial crises, distrust of Wall Street, corporate greed, or a dislike of capitalism could surely all be viable culprits. Through our mutual experiences and research, however, we have found that most millennials aren't cynical anarchists avoiding the stock market in an attempt to fight against the system. Rather, they are individuals who have the desire to learn about investing but are clueless as to where/how to start. We both began investing in the stock market early in our college careers by opening online brokerage accounts and developing investment portfolios based on knowledge we learned within our Finance degrees and through independent research. Word of our involvement in the stock market began to spread in our social circles and people would consistently approach either of us and ask a variety of questions regarding investing. Questions such as: Can you sit down and help me open up an account and pick some stocks? What type of things do you invest in? How do I get started? How much money have you made? (always a favorite). Pre-med students, engineers, business, science, and technology majors alike all showed interest in the stock market. The more and more we talked to people, the more we realized that the problem was not a lack of desire or a lack of intellect. The problem was a lack of logically presented information, and barriers to entry that were far too high. We want to fix that. Investnet will be an online educational platform that will teach anyone the basics of investing, in plain, easy to understand terms. Whether the individual has absolutely zero knowledge of finances, or has some familiarity with investing, Investnet will provide them with the knowledge and confidence necessary to start investing in the stock market (or choose not to, but at least they'll know how).
ContributorsMcKenzie, Connor (Co-author) / Shatila, Jordan (Co-author) / Budolfson, Arthur (Thesis director) / Hoffman, David (Committee member) / School of Mathematical and Statistical Sciences (Contributor) / Department of Finance (Contributor) / W. P. Carey School of Business (Contributor) / Economics Program in CLAS (Contributor) / Barrett, The Honors College (Contributor)
Created2016-05