Empirical Evidence Bearing On Capital Asset Pricing Theories

Empirical Evidence Bearing On Capital Asset Pricing Theories
This study explores the (troubling) empirical evidence bearing on capital asset pricing theories. General formulas for the coefficient on beta and it
standard error are derived, which show that the outcomes of cross–sectional tests have no causal relation to the pricing models. If a test refutes a model,
this could be because the model is misspecified or because poor proxies for true expected returns and betas are used. Simulation and calibration
results suggest that realized returns are a much poorer proxy than estimated betas are. The noise in realized returns typically inflates the estimated
standard error, with drastic effects on the statistical power. Inferences based on ex ante returns are more powerful but suffer from a serious size
problem. JEL: G12, C31, C52. I. Introduction One should hardly have to tell to financial economists that the noise in the data they use is critically
important: garbage in, garbage out. And yet the information surprises in returns are the neglected child in the house of empirical finance, a neglect
described by Elton (1999, p.1218) in the following terms: "When I first entered the profession, anyone using realized returns as expected returns made
the argument that in the long run we should get what we expect. Even this weak defense is no longer used and researchers generally treat realized
returns as expected returns in their tests without any qualifications." In this paper, I shall argue that the information surprises in returns, along
... Get more on HelpWriting.net ...

Relationship Between Medical Service Consumption And...
2Literature Review 2.1 Insurance demand
Economists have long explored the relationship between medical service consumption and health insurance demand, and found that they are dependent
upon each other (DING Jihong, ZHU Minglai, 2007). The relationship between the demand of health insurance and the demand of health care of a
nation has a strong relationship between, the reason lies behind the fact that health insurance is not bought by a customer in order to obtain a good, but
as a mean of been able to pay health related services in the future (Feldstein, 1973). Having health insurance also affects the demand of health care,
specifically when looking at people that could use health care services based on the fact that they're assured and use the health care as a prepaid
service. Since health insurance twists the real price that people pay to utilize health care, there is a great possibility for a moral hazard (Arrow, 1963;
Manning et al., 1987).
Mark V. Pauly (2007) observed that health insurance often induces moral hazard which makes it harder for companies or the government to estimate
the real coverage that a population would require. Thus, this problems weakens the entrance to the market not only of governmental institutions that
would like to take over the health insurance, but also companies that would try to explore the insurance market of a region. John A. Nyman's (2003),
presents a different point of view about how moral hazard affects the consumption of

4.03 Linear Regression
Using MINITAB perform the regression and correlation analysis for the data on CREDIT BALANCE (Y) and SIZE (X) by answering the following.
Generate a scatterplot for CREDIT BALANCE vs. SIZE, including the graph of the "best fit" line. Interpret.
The scatter plot of Credit balance ($) versus Size show that the slope of the 'best fit' line is upward (positive); this indicates that Credit balance varies
directly with Size. As Size increases, Credit Balance also increases vice versa.
MINITAB OUTPUT:
Regression Analysis: Credit Balance($) versus Size
The regression equation is
Credit Balance($) = 2591 + 403 Size
Predictor Coef SE Coef T P
Constant 2591.4 195.1 13.29 0.000
Size 403.22 50.95 7.91 0.000
S = 620.162 R–Sq = 56.6% R–Sq(adj) = 55.7%
Analysis of Variance
Source DF SS MS F P
Regression 1 24092210 24092210 62.64 0.000
Residual Error 48 18460853 384601
Total 49 42553062
Predicted Values for New Observations
New Obs Fit SE Fit 95% CI 95% PI 1 4607.5 119.0 (4368.2, 4846.9) (3337.9, 5877.2)

Values of Predictors for New Observations
New Obs Size 1 5.00
Determine the equation of the "best fit" line, which describes the relationship between CREDIT BALANCE and SIZE.
The equation of the "best fit" line help describes the relationship between Credit Balance and Size is Credit Balance ($) = 2591 + 403.2 Size
Determine the coefficient of correlation. Interpret.
The coefficient of correlation is given as r = 0.752. The

The Milton Friedman Rule
OTHER SIGNIFICANT ACHIEVEMENT OR CONTRIBUTION IN ECONOMICS FIELD
Other significant contribution or achievement of Milton Friedman in economy field is in economics scholarly. He had introduced a few of rule,
function and hypothesis such as Friedman Rule, Friedman's K–percent Rule, saving utility function and permanent– income hypothesis.
Friedman Rule
Friedman Rule was proposed by Milton Friedman in 1969. This rule is about monetary policy. "Money" is anything that generally accepted as payment
for goods and service, but it is costless to provide. So, money is valuable for consumers and businesses (Rognlie,2011).
Friedman rule suggests setting the nominal interest rate at zero. This is due to the logic of opportunity cost of holding money by private sector which
is nominal interest rate should equal to the social marginal cost which is creating additional fiat of money. This means marginal cost of producing
additional fiat of money is zero. Thus, nominal interest rate practically is zero.
Well, the real interest rate always is positive and this means we have a long–term deflation. This also implies that central bank should make the rate of
deflation same to rate of real interest. As the rate of deflation equal to the real rate of interest, people who hold the money would not loss in value of
money when inflation happened.
Friedman's K–percent Rule
Friedman's k–percent rule is proposed by Milton Friedman after Friedman's rule. This rule is the way to control long–term

Compare and Contrast Capital Market
Contrast to Capital market research and Behaviour research
Positive theories explain and predict the behaviour of users of accounting information: i)Reactions of investors to accounting information ii)Association
between accounting numbers and share prices
Capital market research and Behaviour research both positive theories.
Research question: Capital market research investigates the impact of accounting information (especially earnings) on share prices. It is concerns with
investor reactions to accounting information. Behaviour research explains how to use and process the accounting information.
Objective: The main objective of capital market research is to examine relationship between accounting information and share prices. Behaviour ...
Show more content on Helpwriting.net ...
ii) Opportunistic perspective–three hypotheses, to increase managerial compensation: Bonus plan hypothesis: Managers of firms with bonus plans are
more likely to use accounting methods that increase current period reported income;
Debt hypothesis: The higher the firm's debt/equity ratio, the more likely managers use accounting methods that increase income;
Political cost hypothesis: Large firms rather than small firms are more likely to use accounting choices that reduce reported profits.
Based on 'scientific' research. Large samples, statistics, hypothesis testing; aim = universal truth claims.
Rational utility maximising individuals.
Makes universal claims – ignores social context
Focuses on relationships between various individuals and how accounting is used to assist in the functioning of these relationships.
Origins of PAT– Agency Theory: i) Explains why the selection of particular accounting methods might matter; ii) Focus on the relationships between
principals and agents.
2. Criticisms of PAT
i) Only addresses relationship between managers and financial stakeholders (shareholders & debtholders) ii)Non–financial stakeholders are
excluded as users of accounting info iii)Problem with rationality and utility maximisation
PAT is not value–free as it asserts: Based on normative explanations of human behaviour –managers are rational,

Concept Of Capital Asset Pricing Model
1.Introduction
Capital asset pricing model know as CAPM is a model for calculates the required rate of return for any risky asset. This method is often used to
determine the fair price of an investment should be. This essay will discuss about usage of CAPM in securities industry, through probe the advantages
and limitation of CAPM to this industry.
2.Concept of Capital asset pricing model
During 1952, Markowitz came out with a theory based on diversified investment is able to construct the risk–averse investors. He diversified investment
portfolio theory and efficiency of the priory rigorous mathematical tools as a means to demonstrate risk–averse investors in a number of risky assets in
construct the optimal portfolio methods (Markowitz, 1952).
But due to the existence of some problem, from the early 1960s began, some economists began to representatives from the empirical perspective, and
explore investment securities reality that Markowitz's theory in reality can be simplified? By building on the theory of Harry Markowitz on
diversification and modern portfolio theory, William F.Sharpe (Sharpe, 1964), John Lintner (Lintner, 1965) and Jan Mossin (Mossin, 1966) had come
out with the new theory which is knows as Capital asset pricing model.
As expected based on the risk assets of the prediction model based on equilibrium income, CAPM describes the formation of market equilibrium at
investors using Markowitz's theory of investment management conditions, the expected

Altruism Theory: Rapoport And Docquier (2006)
Rapoport and Docquier (2006), gives a unified framework for theoretically modelling the different motives why migrants remit. There framework
clearly points out that altruism is the main motive for remitting. The other motives like exchange, family loan arrangements, insurance, investment and
other mixed motives which they clearly point out are referred to as "enlightened selfishness" by Lucas and Stark (1985). The current study just
provides a brief summary of the main theories of why migrants do transfer based on Rapoport and Docquier (2006) and Lucas and Stark (1985).
Altruism theory/hypothesis: according to this theory, the main motive for migrants' decision to remit is the migrants' care of those left behind i.e.
spouses, children, parents, and members of larger kinship and social circles. Stark (1995), altruism is one of the leading force of non–market transfers
between two individuals in which each individuals cares about his own felicity and the ... Show more content on Helpwriting.net ...
it is a sign of temporary migration. According to this theory, migrants do remit for the exchange of various types of services like looking after the
family members and the migrant's assets by the remaining residents. Rapoport and Docquier (2006) shows that the amount transferred increases with
the amount of services provided and the migrant's income. Compared to the altruistic theory, an increase in the recipient's income may lead to an
increase in the amount transferred by the migrant. For this to work, the compensation for the services provided by the remaining resident ought to be
lower than the amount that the migrant is ready to remit. Therefore, the exchange theory implies that the migrant's income and the recipient's income
which in turn depend on employment opportunities and wage levels in the host and home country respectively to be the key determinants of how much
the migrant will

Rationalist vs. Behavioralist Paradigms
What are the two business paradigms? Within the business disciplines, we are fortunate to have two major paradigms (schools of thought): rationalist
and behavioralist. An ideological/theoretical conflict has existed between the two paradigms for over 50 years. Is human decision behavior more
consistent with the rationalist models or behavioralist models? Behavioral finance has grown out of this conflict and will likely result in the resolution
of the conflict as time passes.
What is a paradigm? Thomas Kuhn's concept of paradigm is useful background for the debate between rationalists and behavioralists over decision
making. His book The Structure of Scientific Revolutions is the premier philosophy of science work written ... Show more content on Helpwriting.net ...
Since no paradigm ever solves all the problems it defines and since no two paradigms leave all the same problems unsolved, paradigm debates always
involve the question: Which problem is it more significant to have solved? Like the issue of competing standards, the question of values can only be
answered in terms of criteria that lie outside of normal science altogether, and it is that recourse to external criteria that most obviously makes paradigm
debates revolutionary. If many revolutions have shaken the very foundations of various fields, then why are we as lay people unaware of it? Textbooks.
Textbooks are teaching vehicles for the perpetuation of normal science and have to be rewritten whenever the language, problem structure, or standards
of normal science change. They have to be rewritten in the aftermath of each scientific revolution, and, once rewritten, they inevitably disguise not only
the role but the very existence of the revolutions that produced them. Textbooks truncate the scientist's sense of the discipline's history and then proceed
to supply a substitute for what they have eliminated. This textbook derived tradition never existed. And once the textbooks are rewritten, science again
comes to seem largely cumulative and linear.
What is the rationalist paradigm? The rationalist paradigm (e.g., microeconomics and finance) is focused upon the structure and processes of markets.
The market is seen as dominating other potential

Utility Vs. Income Inequality Analysis
This paper tries to make a contribution by addressing the subjective well–being to be a more comprehensive measure of quality of life rather than
income. The SWL and its standard deviation make this comparison illuminating with a significant negative correlation shown by all the surveys used in
the paper. As a result, it is expected that whatever negative linkage there may be between income inequality and life evaluations should be stronger for
well–being inequality. this paper is providing three sorts of evidence that supports this hypothesis. The choice of satisfaction with life as an indicator of
well–being is a wise choice. Another possibility could be happiness, which has emerged as an alternative indicator of well–being. While it is... Show
more content on Helpwriting.net ...
In each case, tests are also repeated controlling for a number of other possibly confounding variables. The finding is a consistently negative relation
between well–being inequality and the average reported level of well–being. In all cases the negative relation is stronger than that for income
inequality. The thing that was not really clear to me was why SWL utility function is chosen to be cardinal in the models since from most branches of
economics, the concept of cardinal utility has been eliminated as redundant because ordinal utility has been found to suffice for doing the job. It would
have been better if the authors explained that Cardinal utility has been kept only in welfare economics to support the demand for a more equal income
distribution. The authors also consider the likely risks that well–being inequality in the regions or countries with higher level of well–being may be
estimated with a downward bias. The resulting reduction in the magnitude of estimated coefficients could be best seen as an upper bound on the part
of the correlation that can be ascribed to a mechanical result of how SWL is reported. However, It is not fully described why they did not use both of
the two different distributions –Normal and Logistic– in each cluster for the regressions in which they mentioned in the paper to better compare the

Game Theory Is The Study Of Decision Making Under Competition
Game Theory is the study of decision making under competition. More specially, Game Theory is the study of optimal decision making under
competition when one individual 's decisions affect the outcome of a situation for all other individuals involved.
Game Theory can be broadly classified into four main sub–categories of study:
–Classical Game Theory
–Combinatorial Game Theory
–Dynamic Game Theory
–Other Topics in Game Theory
As a mathematical tool for the decision–maker the strength of game theory is the methodology it provides for structuring and analyzing problems of
strategic choice. The process of formally modeling a situation as a game requires the decision–maker to enumerate explicitly the players and their
preferred moves, ... Show more content on Helpwriting.net ...
The techniques of solving games involving more than one strategies particularly in case of large pay–off matrix are very complicated.
All the situations cannot be analyzed with the help of game theory.
Classical Game Theory
Game theorists consider the axiomatization of the utility function in the case of uncertainty a major contribution in von Neumann and Morgenstern. It
paved the ground for the modeling of rational decision–making when a decision maker is faced by lotteries. Thereafter a utility function, ui(.), which
satisfies the expected utility hypothesis, i.e.
(1) ui([A,p;B,1–p]) = pui(A) + (1–p)ui(B) is called a von Neumann–Morgenstern utility function. Here A and B are events p is the probability that event
A occurs while 1–p is the probability of B occurring. Thus [A,p;B,1–p] is a lottery. It is a notational convention to write [A,p;B,1–p] = A if p = 1 and
[A,p;B,1–p] = B if p =0.
The probability p can be related to a model of relative frequencies and are, in this sense, objective and thus represent risk; or they can be subjective and
thus represent uncertainty.
The utility values which the function ui(.) assigns to events are called payoffs. Because of eq.1 we do not have to distinguish between payoff and
expected payoffs: if player X is indifferent between the lottery [A,p;B,1–p] and the sure event C then ui([A,p;B,1–p]) = ui(C), i.e., the payoffs are

identical. If ui(.)

Examples Of Negative Utilitarianism
Negative Utilitarianism:
Negative utilitarianism is a variant of the moral hypothesis utilitarianism that gives more noteworthy need to diminishing enduring (negative utility or
'disutility') than to expanding satisfaction (positive utility). This contrasts from traditional utilitarianism, which does not assert that lessening enduring
is characteristically more vital than expanding joy. The two adaptations ofutilitarianism hold that ethically right and ethically wrong activities depend
entirely on the results for general well–being. 'Prosperity' alludes to the condition of the individual. The term 'negative utilitarianism' is utilized by a
few creators to signify the hypothesis that diminishing negative prosperity is the main thing that at last issues morally. Others recognize "solid" and
"frail" variants of negative utilitarianism, where solid forms are just worried about decreasing negative prosperity, and feeble renditions say that both
positive and negative prosperity matter yet that negative prosperity matters more.
Different adaptations of negative utilitarianism vary in how much weight they provide for negative prosperity ('disutility') contrasted with ... Show more
content on Helpwriting.net ...
Human enduring makes an immediate good interest, specifically, the interest for help, while there is no comparable call to build the joy of a man
who is doing admirably at any rate. A further feedback of the Utilitarian equation 'Expand delight' is that it accept a nonstop joy torment scale which
enables us to regard degrees of agony as negative degrees of joy. Be that as it may, from the ethical perspective, torment can't be exceeded by joy, and
particularly not one man's agony by another man's pleasure. Rather than the best joy for the best number, one should request, all the more
unobtrusively, minimal measure of avoidable languishing over

Complications Of The Modigliani's Life-Cycle Theory
The General Theory was formally introduced in the 1936 by Keynes and This theory Introduce the relationship between consumption and income, it
was the first discussed about saving motives (Fisher et al. 2010). The Modigliani's Life–Cycle Theory was formally introduced by Modigliani e
Brumberg (1954) (Browning & Lusardi, 1996). The life–cycle theory incorporate socioeconomic variables an uncertain future and relationship between
saving and the age–structure of the population. According to this perspective a young individual has less wealthy and top wealthy is reached just
before individual retire. According to this perspective people are distributed by the population pyramid, which over time the population growth and
there are more number of... Show more content on Helpwriting.net ...
(Browning & Lusardi, 1996). The relationship between saving and the age–structure of the population is still currently considered as a good indicator
for analyst behavior (Deaton, 2005). The Permanent Income Hypothesis was formally introduced by Friedman (1957) and investigated high income
might save more and the individual consumer's at a level consistent with their estimated long term average income (Shefrin & Thaler, 1988). This
theory is similar to theory Life–Cycle. (Browning & Lusardi, 1996). In the 1960s Theodore Schultz and Gary Becker emerged Human Capital
Theory (HCT) that defend investments in knowledge because the key to the economic growth is where people interact with knowledge whatever
increases the productivity and earnings. First publication of the book Human Capital by Gary Becker in 1964 and has impact in economics, education
and sociology literature (Tan, 2014). Education is formalized at primary, secondary, and higher levels by Cohn & Geske (1990), informal education at
home and at work by Schultz (1981), training and education by Mincer (1974) (Sweetland,

The Efficient Market Hypothesis ( Emh )
1. Introduction Ever since Fama (1970) developed the Efficient Market Hypothesis (EMH) and defined the market efficiency as the strength to fully
reveal all available information on the asset prices, there has been endless discussions around this hypothesis. As no arbitrage is implied, multiple
theories are introduced to explore arbitrage activities and their limitations. Stephen Ross once said: "To make a parrot into a learned financial
economist it needs to learn just one word – arbitrage." Under the Efficient Market Hypothesis, there should be no trading techniques that yield positive,
expected, risk–adjusted excess returns (Dothan, 2008), which in turn suggests the absence of arbitrage opportunity. Sharpe and Alexander (1990)
defined arbitrage as the act to buy and sell the equivalent, or fundamentally comparable, security in two different markets at the same time to benefit
from their price difference. Arbitrageurs normally look for mispriced securities and make profit through opposite positions. They long undervalued
stocks and short overvalued stocks, creating upward and downward pressures on security prices towards their fundamental values. In Section2, this
paper aims to study the three limits to arbitrage: fundamental risk, implementation cost, and most importantly, noise trading risk. Three components of
noise trading risk are reviewed: horizon risk, margin risk and short covering risk. Section 3 explores the DSSW model of investor sentiment developed
by four

Mean Variance Analysis
Harry W. Markowitz, the father of "Modern Portfolio theory", developed the mean–variance analysis, which focuses on creating portfolios of assets that
minimizes the variance of returns i.e. risk, given a level of desired return, or maximizes the returns given a level of risk tolerance. This theory aids the
process of portfolio construction by providing a quantitative take on it. It integrates the field of quantitative analysis with portfolio management. Mean
variance analysis has found wide applications both inside and outside financial economics. However it is based on certain assumptions which do not
hold good in practice. Hence there have been certain revisions to it, so as to make it a more useful tool in portfolio management.
Mean ... Show more content on Helpwriting.net ...
All securities can be divided into parcels of any size.
Let R be the expected return of the assets:
R = (R1, R2,.....Rn)T
Let V be the variance/covariance matrix. It is assumed to be positive definite. Пѓ ij = cov (Ri , Rj)
A portfolio X of asset weights is expressed as:
X = (x1, x2,..........xn)T.
[Note that HT denotes the transpose of a matrix H and xi denotes the weight on asset and в€‘xi = 1, where i=1 to n]
The expected return of a portfolio is given by E[RX] = XT E[R], and the variance of the portfolio by ПѓX = XT VX. Thus, the mean–return of the
portfolio X satisfies: Mean = Rx= XT ВЇR = в€‘xi В
ЇRI, where i = 1 to n.
The variance Vx of portfolio return is given by: where Пѓi2 is the variance of return i , and Пѓij measures the covariance between returns i and j . We
denote the standard deviation of X by ПѓX. Often, it is not possible to be short on assets. In that case, we need to add a constraint that all portfolio
weights shall be zero or above: xi в‰Ґ 0.(Mz)
If we search for maximizing the expected return for a given variance, we have to solve the following optimization problem:
As explained by Markowitz, the portfolio selection problem can be formulated as a quadratic program. We can also search for minimizing the
variance given a level of expected return. For a portfolio containing n assets, the minimum variance portfolio is a solution of: Where E* is the level of
expected return.
Thus we get the efficient frontier as shown

Difference Between Intuition And Learning
The two systems had different terms from author to author; for example; rational versus experiential (Epstein et al., 1992), rule–based versus
associative (Sloman, 1996), noetic versus experiential (Strack & Deutsch, 2004), deliberative versus affective (Loewenstein & O'Donoghue, 2005),
and System 1 versus System 2 (Evans, 2003; Kahneman & Fredrick, 2002). These researchers do not only used different names for each of the two
systems, they also used different terms to describe their meaning. The most frequently used terms are two–system, dual–mode, and dual–process. These
theories have in common that there are two different processing modes. The most natural terms are system 1and system 2 modes (Evans, 2008 and
(Keren & Schul, 2009). There are differences between intuition and reasoning thoughts which have been discussed for years. These variances have
been appealed in efforts to form apparently conflicting results in judgment studies under uncertainty (Kahneman & Frederick, 2002; Sloman, 1996,
2002; Stanovich, 1999; Stanovich & West, 2002). Stanovich and West (2000) have been labelled these two cognitive processes system 1 and system
2 which have been agreed on by many researchers on features that discriminate the two types from each other. The processes ofsystem 1 are
emotionally charged most of the time, they are usually fast, automatic, and effortless. They are hard to control or adjust as they are ruled by habit. On
the other hand, the processes of system 2 are

Decision Making And The Prospect Theory
Introduction
Decision making is the act of choosing the best solution to a problem depending on its value and the preferences of the decision maker. In the first
part of this essay, we will explore the Expected Utility theory and the Prospect Theory, which are normative and descriptive approaches to making
decisions with inherent risks. The first part of the essay argues that Expected Utility Theory is a less viable hypothesis to decision making and is
fundamentally flawed compared to the Prospect Theory in description and function. Prospect theory is a better model for decision making because
firstly, decisions are not often made objectively and can be affected by decision weights. Secondly, individuals are notrisk averse as suggested by the
utility theory, but are instead loss averse. Lastly, individuals evaluate decisions not by their final resting utility, but instead they react dependently based
on their reference point. The second part of the essay will delve into the topic of heuristics that emerge in investment decision making. The main biases
that investors make include disposition effect, anchoring and adjustments bias and overconfidence.
Part 1.
Expected utility theory states what rational decision makers should do in order to maximise their utility. On the other hand, Prospect Theory describes
how individuals make decisions when faced with perceived risk and uncertainty. Utility can be explained by how much an individual values an extra
unit of wealth.

What Is CAPM Is An Asset Pricing Theory
In theory, CAPM is an asset pricing model which states that assets are priced commensurate with a trade–off between undiversifiable risk and
expectations of return (Dempsey, 2013). It is based on certain assumptions like Modern Portfolio Theory, Arbitrage Pricing Theory (APT) and Efficient
Market Hypothesis (EMH) where investors are assumed rational under the Market Rationality. Efficient Market Hypothesis: Although all information
may be reflected in the price of stock following the EMH, the application of CAPM amounts to selecting only relevant data from the markets to be
imputed into the model, thus subjecting CAPM to predictions based only on the information selected (Dempsey, 2013), which may produce less than
accurate results. Random... Show more content on Helpwriting.net ...
While the CAPM uses the ОІ largely as an adjusting factor, the FFM, mainly uses the two introductory factors for adjustments as their models reflect
little to no adjustments to ОІ causing a disconnection between the two models. If sensitivity to market risk as captured by ОІ in CAPM does not
motivate investors, it is, on the face of it, difficult to envisage how the book–to–market equity and firm size variables in the FFM can be expected to
motivate them (Dempsey,

Rsytvboub
Utility Management System Cost and Time Benefits and
Implications from the Local Agency Perspective
Downloaded from ascelibrary.org by Indian Inst of Technology– Mumbai (IITM) on 05/11/16. Copyright ASCE. For personal use only; all rights
reserved.
Mark Lee, P.E. 1; Jorge A. Rueda–Benavides 2; Douglas D. Gransberg, Ph.D., P.E., M.ASCE 3
Abstract: Utility management systems (UMSs) have become more common for government agencies, and their use has recently been advocated by
AASHTO on a statewide basis. By identifying current utility locations and correlating utility–related information between ongoing and upcoming
projects, UMSs can reduce the occurrence of unexpected delays and cost overruns resulting from unforeseen utility ... Show more content on
Helpwriting.net ...
It is defined as a set of
"web–based methods of facilitating both internal utility–related communications and necessary communications between the state
DOT, municipalities, and utility companies as projects are planned and constructed" (AASHTO 2014).
Even though this study is mainly focused on the use of UMSs for utility relocation activities as a requirement for the completion of transportation
construction projects, the authors recognize that the potential capability of these systems may involve virtually all utility–related procedures required
by transportation agencies.
Therefore, and for the purposes of this paper, a UMS is defined as a set of policies and information technology resources aimed to improve
utility–related procedures and activities by facilitating coordination and communication within the agency and, in some cases, among stakeholders (e.g.,
public agencies, utility owners, contractors, and the community). The principal goal of UMSs is the reduction of time and cost by expediting
processes, identifying potential utility conflicts in a timely manner, and optimizing decision–making procedures. The range of features of the system
may vary depending on the specific preferences, capabilities, and requirements of each agency. For instance, at the state level, while the UMSs

Is The Rational Actor Hypothesis Used Throughout The...
We can usefully predict the behaviour of others in group contexts by assuming that they are acting rationally. This is the rational actor hypothesis used
throughout the social sciences. To usefully apply this idea we need a definition of rationality; the one we will analyze is that people maximize some
utility in deciding on an action. To understand what is meant by utility consider the following concept. A payoff is a reward in a game that has a
definite expected worth (e.g. money) that is known to both players of a game. A utility is then something which causes payoff maximization, the
maximization of such payoffs by players, given the information available to them plus the assumption that other players are playing to maximize their
payoffs. A key assumption of the model is that maximizing a utility leads to a fixed set of preferences, in order for any sort of uniqueness to be present
in predictions. This idea of rationality through payoff maximization rests on the Von Neumann–Morgenstern utility theorem. This theorem says that
given four axioms (defined in the Glossary): completeness, transitivity, continuity, and independence, there always exists a utility function which a
player in a game maximizes when making a decision. My contention in this paper is that utility maximization and therefore the rational actor
hypothesis is too broad of an idea to be of practical use.
While the axioms of payoff rationality clearly imply consistency of behaviour, since transitivity and

Efficient Market Hypothesis and Behavioral Finance
Efficient market hypothesis and Behavioral finance
Fall 2011 Teacher: GuГ°rГєn Johnsen V–780–BFIM
Student: RГєnar GuГ°nason SSN:1804784939
Table of Contents
Introduction ................................................................................................................................ 3 1.1 Efficient market hypothesis
.................................................................................................. 3 1.2 A criticism on the efficient market hypothesis
................................................................. 4 2.1 Behavioral finance and the efficient market hypothesis ...................................................... 5 2.2 Prospect
theory and Loss aversion ... Show more content on Helpwriting.net ...
The strong form claims that asset prices fully reflect all of the public and inside information available, therefore no one can have advantage on the
market in predicting prices. The introduction of the efficient market hypothesis marked a turning point in scholarly researches on security prices and
many studies have been made since to test market efficiency. Many studies of the weak form of market efficiency have been made on technical
analyses and how investors use them to predict about future security prices by looking at past prices. In 1969 Fama, Fisher, Jensen and Roll were the
first to test the semi–strong form of market efficiency by using event studies. Their conclusion was that stock prices adjust very rapidly to new
information. Many scholars since then have studied how new information affect the market by using event studies. Many articles about the strong form
have also been published and most of them study professional investor performances in the stock market (Malkiel, 2003). Many of the studies on
technical analyses, event studies and the performance of professional investors in the stock market have reached the conclusion that markets are
efficient and therefore that stock prices are right (Malkiel, 2003). Before studies of behavioral finance became popular, evidences began to appear that
were inconsistent with the hypothesis of market efficiency.
1.2 A criticism on the efficient market hypothesis
In 1976, Rozeff and Kinney published an

Financial Management Homework
Problem Set 1. Stocks offer an expected rate of return of 18%, with a standard deviation of 22%. Gold offers an expected return of 10% with a
standard deviation of 30%. a. In light of the apparent inferiority of gold with respect to both mean return and volatility, would anyone hold gold? If
so, demonstrate graphically why one would do so. Explain. Answer: Even though it seems that gold is dominated by stocks, gold might still be an
attractive asset to hold as a part of a portfolio. If the correlation between gold and stocks is sufficiently low, gold will be held as a component in a
portfolio, specifically, the optimal tangency portfolio. Efficient frontier Efficient frontier b. Given the data above, re–answer part (a)... Show more
The

The Real Business Cycle Theory Model
The two main models that draw most attention from the neoclassical period are the Solow model in the long run and the Real Business cycle
incorporated with the Ramsey consumption or Euler equation in the short run. The Ramsey model in the short makes a more accurate depiction of
what consumption and production in an economy would look like. The model in the short run follows a Dynamic stochastic general equilibrium;
this type of model is more complex and allows for it to show economic growth in a closed cyclical model. The Ramsey model, which is the The
Real Business Cycle Theory model in the short run, is far superior to the long run Solow model. However, the long run model by Solow has its
benefits because it represents a closed economy producing one good with constant capital accumulation; yet, it fails to account for technological
changes and other shocks that take place in an economy. This model is used over such a long period that it becomes a very theoretical generalization.
Both these models explain growth in the economy, but the short term Real business cycle theory is a more accurate representation of economic growth
as it depicts a direct correlation between consumption and production and accounts for economic shocks. These two models aim to explain how
economic growth takes place due to changes in production and consumption. Economists have constantly tried to explain how growth occurs in an
economy. This is done by the creation of different models and

microeconomics
3. Consider the market for minivans. For each of the events listed here, identify which of the determinants of demand or supply are affected, also
indicate whether demand or supply increases or decreases. Then draw the diagram to show the effect on the past and quantity of minivans A. People
decide to have more children. Answer: It is expected to have more children, and household spending will increase, demand will reduce household
wagon. From the supply point of view, due to population increases, station wagon for home consumption will increase, so the producers will increase
supply. Ans in: . If people decide to have more children, they will want larger vehicles for hauling their kids around, so the demand for minivans will
increase.... Show more content on Helpwriting.net ...
TV demand curve unchanged. The result is the equilibrium price of the TV down, the equilibrium quantity increased, as shown in Figure 4–8. Ans in:
The technological improvement would reduce the cost of producing a TV screen, shifting the supply curve to the right. The demand curve would not
be affected. The result is that the equilibrium price will fall, while the equilibrium quantity will rise. c.Draw two more diagrams to show how the
change in the market for TV screens affects the markets for DVDs and movie tickets Ans: Because the TV and DVD are complementary goods, TV
prices fall so that the increased demand for DVD. Increased demand caused DVD equilibrium prices, the equilibrium quantity increases, as shown in
Figure 4–9. Ans in : The reduction in the price of TV screens would lead to an increase in the demand for DVDs because TV screens and DVDs are
complements. The effect of this increase in the demand for DVDs is an increase in both the equilibrium price and quantity Ans 2: As TV and movie
tickets are substitutes, TV movie ticket prices fall so that reduced demand. Reduced demand equilibrium that movie ticket prices, reducing the number
of equalizer, shown in Figure 4–6. The income factors determining demand affected the stock market crash to make people 's dividend, dividend
income decreased demand for home station wagon will be reduced. Ans 2 in : The reduction in the price of TV screens would

PROJECT PART C: Regression and Correlation Analysis Essay
MATH533: Applied Managerial Statistics
PROJECT PART C: Regression and Correlation Analysis
Using MINITAB perform the regression and correlation analysis for the data on SALES (Y) and CALLS (X), by answering the following questions:
1.Generate a scatterplot for SALES vs. CALLS, including the graph of the "best fit" line. Interpret.
After interpreting the scatter plot, it is evident that the slope of the 'best fit' line is positive, which indicates that sales amount varies directly with calls.
As call increases, the sales amount increases as well.
2.Determine the equation of the "best fit" line, which describes the relationship between SALES and CALLS.
The equation of the 'best fit' line or the regression ... Show more content on Helpwriting.net ...
Explain your answer.
MINTAB Results:
Descriptive Statistics: SALES(Y), CALLS(X1)
Variable N Mean SE Mean StDev Minimum Median Maximum
SALES(Y) 100 42.340 0.417 4.171 32.000 42.000 52.000
CALLS(X1) 100 162.09 1.80 18.01 124.00 160.50 201.00
Since the maximum value of the predictor variable (calls) is used to formulate the given regression model is 201.00, which is less than 300, we
cannot use the given regression model to accurately estimate the weekly sales for weekly call of 300. So we can't say anything about the weekly sales
when weekly calls are 300.
In an attempt to improve this model, we attempt to do a multiple regression model predicting SALES based on CALLS, TIME, and YEARS.
11.Using MINITAB run the multipleregression analysis using the variables CALLS, TIME, and YEARS to predict SALES. State the equation for this
multiple regression model.

MINTAB Results:
General Regression Analysis: SALES(Y) versus CALLS(X1), TIME(X2), YEARS(X3):
Regression Equation
SALES(Y) = 8.60864 + 0.20551 CALLS(X1) + 0.0520391 TIME(X2) – 0.181791 YEARS(X3)
Coefficients
Term Coef SE Coef T P 95% CI
Constant 8.60864 3.55193 2.4236 0.017 ( 1.55811, 15.6592)
CALLS(X1) 0.20551 0.01409 14.5811 0.000 ( 0.17753, 0.2335)
TIME(X2) 0.05204 0.10570 0.4923 0.624 (–0.15778, 0.2619)
YEARS(X3) –0.18179

Balance Error Scoring System
Dizziness and/or imbalance are common symptoms for athletes sustaining a concussion [1–5]. It is speculated that the acute symptoms of dizziness and
/or imbalance experienced in these athletes is not actually a peripheral vestibular dysfunction (i.e., inner ear), but rather a central disruption between the
vestibular system and the pathways for vision, known as a visual–vestibular interaction mismatch [6–8]. This mismatch can lead to decreased gaze
stability with head movements and may result in common symptom complaints of blurred vision or diplopia [9–10]. Athlete reported symptoms are a
large portion of the concussion assessment battery; however, it is well known that athletes under–report symptoms [11–12].
Thus, determining objective and accurate measures to help determine safe return to play on the sideline and during the return to play progression
protocol appears to be a necessary task for health care professionals. Currently, balance function is most commonly assessed with a postural control
measure known as the Balance Error Scoring System (BESS), which indirectly assesses vestibular sensory input. One limitation of this measure is the
lack of information regarding the functional use of the visual–vestibular system, specifically the vestibulo–ocular reflex (VOR). The VOR allows for
stable gaze during head movements [13–14] and is imperative to the athletes' optimal ... Show more content on Helpwriting.net ...
There is emerging literature that recommends the use of an objective clinical measure known as the Dynamic Visual Acuity Test (DVAT), to both
evaluate

The Robots Rebellion
Humans are constantly manipulating their environmental cues and outputting their thought processes into their daily behaviours. It is not uncommon
for substantial irrationality to be present in many of these behaviours exerted into the world. Take for example the two most basic principles of
decision theory, the sure thing principle and the transitivity principle. You are choosing between two possible outcomes, A and B. There is an event X
that may or may not occur in the future. If you originally prefer outcome A to outcome B, then you should always prefer outcome A to B regardless of
uncertainty or certainty of event X occurring. You are choosing between two outcomes. If you originally prefer option A to B and following that, B to
C, then... Show more content on Helpwriting.net ...
The rule mentions what is on the back of a vowel, but not a consonant, therefor E is relevant to the rule and F is not. The rule mentions nothing
about what is on the back of an even number, therefor 2 is irrelevant to the rule. However, 7 is the other correct response because there is a
possibility that it has a vowel on the back, and if it did, the rule would prove to be false; to show that it is not false, the 7 card must be turned over.
Davies mentions that putting this "if P, then Q" question in context is easier to test for the falsity of the rule by showing the "if P, and not Q". This task
demonstrates that even when you are given the answer in the question, the natural TASS tendency ignores this and focuses its attention on the
assumption of truth and confirming the hypothesis. A task, such as this one, demands the specific attention to an array of subjects, in which some of
these subjects have the property of being true or not. As a consequence of this, the natural processing biases of TASS emerge. Unless overridden by the
analytic system, this demonstrates one of the cognitive biases mentioned by Davies known as confirmation bias. Confirmation bias is the act of
accepting, seeking out, and remembering things that confirm and support your views. You are actively trying to show that things are false, and when
you fail to do so, that proves success. Another bias that is often a product of the TASS system

Long Dong Chinese Man Essay
arentheses at the start of the question, and the total points for the entire assignment adds up to 100. This assignment covers Statistics as related to
finance. Refer to Note on Review of Statistics before you attempt this assignment. And feel free to use the statistical functions in Excel/Spreadsheets to
calculate stuff.
In accordance with the Coursera Honor Code, I (Amanda Milligan) certify that the answers here are my own work.
Question 1
(5 points) Shareholders of Exxon Oil Company face a variety of risks in holding its shares. If the economy falters, people tend to travel less and so
there is less demand from the airlines industry for Exxon's fuels. This type of risk that Exxon's shareholders bear is
Specific/Idiosyncratic Risk. ... Show more content on Helpwriting.net ...
Which investment best fits your grandfather's needs?
Portfolio A.
Portfolio C.
Portfolio B.
Question 4
(10 points) Since investors are typically risk averse, they require a risk premium for any additional risk, regardless of source, that holding a security
requires them to bear.
True.
False.
Question 5
(10) While computing covariances among the returns of several stocks can be complicated, the covariance of a stock's return with itself is always one.
False.
True.
Question 6
(10 points) As a CEO you wish to maximize the productivity of your workers. You are thinking about providing your employees with smartphones so
they can be readily available to clients and increase sales. However, you are also concerned that your employees are just as likely to download apps
that will distract them from their work, leading them to play games and update their social networking sites rather than focus on the job of pleasing
clients. To test this you randomly select 6 employees for an experiment. You provide 3 with the new smart phone and the other 3 use their existing
technology. The following chart shows their changes in sales. Based on this small sample, what is the correlation between smartphone and increase in

sales? [Hint: It may help to use the spreadsheet function CORREL to calculate the correlation. Also, enter the correlation in percentage terms with no
more than two decimals, but do not enter the % sign. ] {Anthony, Smartphone: Yes; change in sales 60; Kira,

In the modern finance theory , behavioral finance is a new...
In the modern finance theory , behavioral finance is a new paradigm , which seeks to appreciate and expect systematic financial market influence of
psychological decision making ( Olsen R A, 1998). In the recent studies irrationality in the decision making was revealed , based on certain cognitive
limitations. The present chapter is divided into two aspects
According to traditional models in finance and economics, human beings are rational while taking their decision. However the recent studies explain
that decision making is based on certain cognitive limitations. As the information's are overloaded, we will be applying certain short cuts or heuristics
in order to take a decision. The most important heuristics in the representativeness ... Show more content on Helpwriting.net ...
Essentially, behavioral finance attempts to explain the what, why, and how of finance and investment, from a human perspective" (See figure 2).
(Shefrin, 2000) however, mentioned the difference between cognitive and affective (emotional) factors: "cognitive aspects concern the way people
organize their information, while the emotional aspects deal with the way people feel as they register information" . Figure 2 The Underpinning of
Behavioral Finance
Source: (Victor Riccardi & Helen K Simon, 2000)
PSYCHOGRAPHIC MODELS
Models are designed to classify people according to certain characteristics, tendencies or behavior.. Psychographic classifications are particularly
relevant with regards to individual strategy and risk tolerance. The useful models of investors psychographic were Barnewall (1987) and Bailard, Biehl
and Kaiser (1986).
Barnewall Two way model (Barnewall, 1987)
This is one of the most previous and most prevalent investor model based on the work of Marilyn MacGruder. Barnewall distinguished the investors
into two types : passive investors and active investors.
Passive investors are those investors those who have become wealthy passively –by inheritance or by risking the capital of others rather than their own
capital. They have a greater need for security than they have tolerance for risk. Occupational groups such as corporate executives, lawyers, Chartered
Accountants,

Pros And Cons Of Capm
1.Introduction
Capital asset pricing model know as CAPM is a model for calculates the required rate of return for any risky asset. This method is often used to
determine the fair price of an investment should be. This essay will discuss about usage of CAPM in stock market industry, through probe the
advantages and limitation of CAPM to this industry.
2.Concept of Capital asset pricing model
During 1952, Markowitz came out with a theory based on diversified investment is able to construct the risk–averse investors. He diversified investment
portfolio theory and efficiency of the priory rigorous mathematical tools as a means to demonstrate risk–averse investors in a number of risky assets in
construct the optimal portfolio methods.
But due ... Show more content on Helpwriting.net ...
One of the example is a risk–free rate of return is the United States 10 years government bonds. If stock investors need to bear additional risk, then he
will need on the basis of the risk–free rate of return in order to obtain the corresponding premium. Therefore, equity market premium is equal to the
market expected rate of return. Equity risk premium is the stock market premium and a ОІ coefficient of the product.
4.Pros and Cons of Capital asset pricing model
There is only one reason investors receive higher returns make that investment in high–risk stocks. Therefore, CAPM occupy dominant position in this
modern financial environment (Fama and French, 1993).
4.1Advantages
The biggest advantage of CAPM is simple and clear. It is the prices of any kind of risky securities are divided into three factors: the risk–free rate of
return, price and unit risk. Throughout these three factors combine together, it will provide a clear picture for the analyst. In addition, another
advantage is the usefulness of CAPM. It allows investors to review and evaluate selection of various financial assets competitive quotes based on the
absolute risk rather than the total risk. Investors in the financial market have adopted this method as it able to solve the general problem of investment

Essay on The Efficient Market Hypothesis
1.INTRODUCTION
The efficient market, as one of the pillars of neoclassical finance, asserts that financial markets are efficient on information. The efficient market
hypothesis suggests that there is no trading system based on currently available information that could be expected to generate excess risk–adjusted
returns consistently as this information is already reflected in current prices. However, EMH has been the most controversial subject of research in the
fields of financial economics during the last 40 years. "Behavioural finance, however, is now seriously challenging this premise by arguing that people
are clearly not rational" (Ross, (2002)). Behavioral finance uses facts from psychology and other human sciences in order to ... Show more content on
Helpwriting.net ...
The weak–form efficiency cannot explain January effect. In semi–strong–form efficient market, to test this hypothesis, researchers look at the
adjustment of share prices to public announcements such as earnings and dividend announcements, splits, takeovers and repurchases. As time goes,
later tests tend to be not supportive to EMH. For instance, semi–strong–form efficiency cannot explain the pricing/earning effect. In strong–form
efficiency, the highest level of market efficiency, Fama (1991) pointed out the immeasurability of market efficiency and suggested that it must be tested
jointly with an equilibrium model of expected. However, perfect efficiency is an unrealistic benchmark that is unlikely to hold in practice.
Last but not least important, an efficient capital market is one in which stock prices fully reflect all available information. However, the paradox is that
since information is reflected in security prices quickly, knowing information when it is released does an investor little good. Furthermore, it is
impossible to create a portfolio which would earn extraordinary risk adjusted return. As a consequence, all the technical and fundamental analysis are
useless, no one can consistently outperform the market, and new

Experiential Groups
These groups are, of course, not given the expected values. The order of the options would be randomized to reduce bias. The experiential groups
receive options with the same terms, but the subjects are told to sample the options by interacting with a monitor and five buttons to figure out each
choice's consequences, rather than being given the terms of the options outright. The monitor and buttons would work the exact same way as in the
Gonzalez and Mehlhorn experiment, with the monitor generating an outcome according to the terms of an option every time that option's button is
pressed. To address the over/under–sampling issue in the original experiment, subjects would be required to interact with the buttons for exactly five
minutes, a realistic... Show more content on Helpwriting.net ...
The results would likely be similar to those in the high–sampling experiential groups of the Gonzalez and Mehlhorn experiment, finding a framing
effect. For the experiential gain control group, if the subjects chose safer options like option 5, it would suggest that people are still risk–averse in gains
frames even with experiential learning. If people chose riskier options like option 1, it would imply that the people are actually risk–seeking in gains
frames when they learn experientially. This would support the view that the framing effect reverses in the experiential learning paradigm, causing
people to become risk–seeking in gains. For the experiential loss control group, if subjects made riskier choices like option 1, it would mean that
people are still risk–seeking in losses even when learning experientially. However, if subjects made safer choices like option 5, it would mean that
the framing effect is reversed when people learn experientially. The difference between the proportion of subjects who made the risky choice in the
experiential loss control group and experiential gain control group would help to show how much the framing effect holds up for experiential learning:
if more subjects chose the risky option in the loss group, the effect holds for experiential learning. If subjects chose the risky option a

Example Of Prospect Theory
Prospect theory is a theory of decision making under conditions of risk. The theory is best known for its hypothesis that individuals are risk–averse
with respect to gains and risk–acceptant with respect to losses and for its emphasis on the importance of the actor's framing of decisions around a
reference point.
Prospect theory is one of a number of alternative theories of individual choice that behavioral decision theorists have constructed in an attempt to
integrate observed anomalies in expected–utility theory into a more descriptively accurate theory of choice using an S–shaped value function. The
S–function curve of the value is derived from the experimental results and lacks a complete theoretical explanation. But Tversky and Kahnemen ...
Prospect theory is considered "substantive rationality" rather than "procedural rationality." Substantive rationality is the optimization of a given goal
under given conditions and constraints, and is a function of goals and situational constraints but not intervening reasoning process. While procedural
rationality focuses on the decision–making process. Therefore, the prospect theory cannot be adapted to the "cognitive–rational debate". The evaluation
stage in the prospect theory is more similar to the rational economic theory. But it is the theory editing and framing have more in common with
cognitive process theories. To conclude, the prospect theory research program is a limitation of the theory but not a fatal flaw.
Shortcomings of Prospect Theory
a)The descriptive generalizations on which prospect theory is based emerge from static conditions of experimental research in highly structured,
non–interactive laboratory settings make it difficult to extrapolate its findings to the complex world of international relations where the consequences
of one's actions are partially a function of the actions of another.
1)It is extremely difficult in the real world to identify whether an actor selects a particular option because of framing, loss aversion, or any other
anomalies of expected–utility

Examples Of St. Petersburg Paradox
2.2.6 The Bernoulli Hypothesis
Daniel Bernoulli, the 18th century Swiss mathematician evinced great interest in the problem known as St. Petersburg paradox and tried to resolve
this. Bernoulli establish that Russians were reluctant to make bets even at better than 50–50 odds knowing wholly that their mathematical expectations
of winning money in a particular kind of gamble were greater the more money they bet. This contradiction is known as St. Petersburg Paradox. St.
Petersburg paradox denotes to the problem why most people are unenthusiastic to take part in a fair bet or game.
For example, offer of participating in a gamble in which a person has even chance (that is, 50–50 odds) of winning or losing ВЈ1000 is a fair game. To
explain it, Bernoulli ... Show more content on Helpwriting.net ...
Since the individual behaves on the basis of expected utility from the extra money if he wins a game and the marginal utility of money to him declines
as he has extra money, most individuals will not 'play the game', that is, will not make a bet. It is in this way that Bernoulli resolved 'St. Petersburg
paradox'.
A graphic illustration will make clear Bernoulli's solution to the paradox. Consider Figure 17.1 in which on the X–axis, the quantity of money
(thousands of rupees) and on the Y–axis, marginal utility of money (rupees) to an individual are measured. Suppose an individual has 20 thousands of
rupees with him and can make a bet at even odd (i.e., 50–50 chance) of winning or losing rupees one thousand.
If he wins the bet, money with him will rise to 21 thousand (20 + 1) rupees. If as a result of an increase in money with him, his expected marginal
utility of money declines, then the expected marginal utility of extra one thousand rupees to him which is depicted by the rectangle CDFE is less than
the extra marginal utility of the previous one thousand (i.e., 20th thousand) rupees which is measured by the rectangle

The Efficient Markets Hypothesis Posits That `` Security...
The efficient markets hypothesis posits that "security prices fully reflect all available information (Fama, 1991)." In an efficient market, a stock's price
accurately depicts its fundamental value. However, researchers have shown that real markets are actually inefficient, and are hindered by risky
arbitrage and irrational investors. Because of market frictions, incomplete information, and systematic biases, stock prices react to changes in
uninformed demand in addition to actual fundamental shifts, resulting in sustained and pervasive mispricing. This essay aims to challenge the theory
of market efficiency, and in so doing, support the position that stock prices do not always reflect stocks' fundamental values. Riskless arbitrage is one
underlying assumption of the efficient markets hypothesis. It theorizes that any opportunities to profit through mispriced stocks will be immediately
exploited by savvy arbitrageurs and subsequently eliminated, returning market price to equilibrium at its fundamental value. However, in real markets,
arbitrage is risky due to market frictions and incomplete information (Shleifer & Summers, 1990). The market friction of transaction costs such as
commission and the bid–ask spread may limit the willingness of investors to participate in arbitrage. Likewise, incomplete information creates risk for
arbitrageurs, particularly when shorting overvalued stocks. The market may potentially do well and thus justify the overpricing, or the market may

There Has Been Great Debate On Whether Science Should Be
There has been great debate on whether science should be value–free or not. The value–free ideal view of science states that the scientific internal
stages should remain free of non–epistemic values and should only be a factor in the external stages of science (Douglas, ). These internal stages are
the selection of different methodologies, choosing which data is useful, and within the interpretation of data (Douglas, ). Non–epistemic values are
beliefs, values, and morals, whereas epistemic values are cognitive values focusing on truths, knowledge, and understanding. Rejecting the value–free
ideal of science means accepting the risk associated with the rejection or acceptance of a hypothesis because of the non–epistemic values within the ...
Hempel (year) also believed that if there is no evidence can determine certainty within a hypothesis as values are needed to weigh the consequences of
possible errors that may occur in the decision to reject or accept a hypothesis.
Therefore, the potential implications of science are beyond the just the scope of the science field and extend into the public. Only the resultant
technologies of research can be limited but the existence of knowledge alters the outlook on the world. Douglas states search for truth is a
nontranscendent good but the development of knowledge is important and must be weighed against moral choices. Specifically, a scientist must
consider the unintended consequences of their actions in regards to negligence and recklessness to determine if the risks offset the benefits.
Recklessness is defined as being fully aware of the risks or imposing the unjustified risks on others, whereas negligence is defined as being unaware of
the risks that could cause harm and prevent the risk. The Challenger disaster seems to exemplify the issues of scientists, or in this case, engineers,
removing their role responsibilities. The engineers were told to put on their management hat by the Morton–Thiokol management team. However, it
seems that there should not be separate hats but rather there should only be one hat that considers the consequences and implications of their own
actions. The Challenger is not the only example of scientists removing their

The Earned Income Tax Credit (EITC) is a program that was...
The Earned Income Tax Credit (EITC) is a program that was set in place, in 1975, to improve "the economic status of low–income persons [...]
granting nearly $40 billion to low–income households" (Borjas, 59). As is clear from the name of the program, The EITC is a program that provides
tax credits to those who qualify, the EITC could even produce a negative tax liability for some households, in particular the type I will discuss, which
would provide substantial income increases for these households. In order to qualify for the EITC, the recipients must be active members of the labor
force, in that they must have labor income, and for the group that I will be focusing on, single mothers, total household income must be below $33,241
for single ... Show more content on Helpwriting.net ...
I will look at the performance of the Earned Income Tax Credit, in terms of its ability to increase the labor supply of single–mothers, as well as any
complications that may arise from the EITC program. (Athreya, 2012) The benefits of the Earned Income Tax Credit for single–mothers have been
outlined by numerous studies written by renowned Economists, such as Bruce D. Meyer and Dan T. Rosenbaum of the University of Chicago and the
University of North Carolina at Greensburg respectively. The article by Meyer and Rosenbaum,Welfare, The Earned Income Tax Credit, and The
Labor Supply of Single Mothers, contains the data and statistics that I will use as the basis of my analysis and where I will draw the bulk of my
conclusions on the benefits and drawbacks of the Earned Income Tax Credit on the labor supply of single–mothers. Meyer's and Rosenbaum's research
is extremely significant to the particular topic that I am outlining as it uses data collected from a well–known survey and furthermore, looks
specifically at the groups that are of particular interest of my research.
Meyer and Rosenbaum collected their data from the Current Population Surveys (CPS) from 1984 to 1996. Once the data was collected the relevant
data was extracted, namely the data corresponding to single–women ages 19 to

Why Is Positive Accounting Standards?
1. Introduction:
This paper is a contribution made my Ross L. Watts and Jerold L. Zimmerman, titled as "Towards a Positive Theory of Determination of Accounting
Standards" published by American Accounting Association. It explores the factors that have been influencing management's attitudes in lobbying on
accounting standards. It describes an attempt made by two in evolution and development of the Positive Accounting Theory by reasoning, factors like
taxes, regulations, management compensation plans, book keeping cots, etc. The results concerned with the theory are consistent.
2. Summary of the Article
To begin with it is important to understand why Positive accounting theory is incorporated by a Company. Commonly know as PAT, it... Show more
This theory has a precondition, which focuses on understanding the management incentives.
The paper begins with introduction of the factors affecting management wealth which are listed as; i)Taxes, ii) Political costs, iii) Information
Production Costs, and iv) Management Compensation Plans. Moving on, it gives description about various assumption that an organisation needs to
consider before they start following the Positive Accounting Theory approach. Two main assumption theresearch paper is based on are:
Individual act to maximise their own utility. (Article) This assumption is also used by Gordon (1964) in an early attempt to derive positive accounting
theory. Gordon model and variants of it, were also tested know as the "smooth" literature.
Management utility is a positive function of the expected compensation in future periods and decreases the firms reported earning.
The Study 1978 corroborated the hypothesis that management is a determinant role in accounting standard and concretely pointed that firm size is the
most consequential factor will influence managerial deportment, which has a paramount implicative insinuation for setting accounting standard.
Furthermore, this conclusion of this paper convinced the feasibility of positive theory in accounting research which as a revolution in accounting
research area. On the other hand, Study 1998 additionally gave us a paramount conclusion which

Distribution Mapping and Dealer Satisfaction Survey for...
Distribution Mapping & Dealer Satisfaction survey for Nokia Mobile Phones|
A PROJECT REPORT
Under the guidance Of
Mr. Neeraj Arora
______________________________
MOHAMMAD AREEB
Roll no: 521159708
______________________________
in partial fulfilment o f the requirement for the award of the degree
Of
MBA
IN
[Marketing]
JUNE 2013
ACKNOWLEDGEMENTS
First, I thank my Supervisor Mr. Neeraj Arora for his continuous support to making this project Mr. Neeraj Arora was always there to listen and to
give advice. He is responsible for involving me in this project in the first place. He taught me how to ask questions & which technique used for
analysis. He showed me different ways to approach for the analysis.
Special thanks goes to my ... Show more content on Helpwriting.net ...
Satisfied with price 24

4. Satisfied with Advertisements 25
5. Satisfied with Features of Nokia 25
6. Satisfied with Audio output 26
7. Satisfied with Software compatibility 26
8. Satisfied with Built in memory 27
9. Satisfied with Camera/video quality 27
10. Satisfied with Accessories28
11. Satisfied with Appearances 28
12. Satisfied with services29
13. Satisfied with Battery backup 29
14. Satisfied with Brand image 30
15. Satisfied with its life 30
16. Fully aware all the Features 31
Chapter 1
Introduction
Background
Dr. Martin Cooper of Motorola, made the first US analogue mobile phone call on a larger prototype model in 1973.
On April 3, 1973, Motorola employee Dr. Martin Cooper placed a call to Dr. Joel S. Engel, head of research at AT&T's Bell Labs, while walking
the streets of New York City talking on the first Motorola DynaTAC prototype in front of reporters. Motorola has a long history of making automotive
radios, especially two–way radios for taxicabs and police cruisers.
Nokia has played a pioneering role in the growth of cellular technology in India, starting with the first–ever cellular call a decade ago, made on a Nokia
mobile phone over a Nokia deployed network.
Nokia started its India operations in 1995, and presently operates out of offices in New Delhi, Mumbai, Kolkata, Jaipur,

Empirical Evidence Bearing On Capital Asset Pricing Theories

Recommended

Recommended

More Related Content

More from Robyn Martin

More from Robyn Martin (20)

Recently uploaded

Recently uploaded (20)

Empirical Evidence Bearing On Capital Asset Pricing Theories