3. What is an example of an anomaly that once reported in research studies has attenuated? Is
this positive or negative from the standpoint of market efficiency?
Most of the financial anomalies have attenuated. An example is the small firm effect financia
Why might some prefer a prix fixe (fixed price) dinner costing about the same as
an la carte one (where you pay individually for each item)? (Assume the food is
identical.)
Some reason why a prix fixed dinner may be preferred is because a prix fixe dinner
1. Arbitrage is limited because the wealth of arbitrageurs is limited. Discuss this statement in the context
of those who are managing their own money and those who are managing other peoples money.
Arbitrage generally involves a very small profit margin
2. Differentiate the following terms and concepts:
Primacy and recency effects
The first item is considered primarily in the beginning since it is important, this is called primacy effect
the items which are at the end list referred to as recency effect.
Real Options
In many business decision scenarios, managers faces the dilemma, for example, whether to continue the
project or to abandon it, whether to finance a project with debt or equity, etc. How can we apply the
knowledge of traditional option prici
Real Options
In many business decision scenarios, managers faces the dilemma, for example, whether to continue the
project or to abandon it, whether to finance a project with debt or equity, etc. How can we apply the
knowledge of traditional option prici
2. What does the early evidence on the ability of behavioral Investing to enhance performance
tell us? Please cite recent academic literature.
It tells us that understanding of behavioral finance plays a crucial role in enhancing portfolio
performance. Be
1. Home bias has a potential information-based explanation. Explain.
The home bias rst document by French and Poterba (1991), is the stylized fact that despite the
diversication gains investors can achieve by holding stocks of foreign companies, they
freq
Discuss the merits of the following statement: Inside directors should constitute the majority of
a corporate board, because insiders have superior understanding of the firms business
operations. What evidence can you cite in support or in opposition to t
Whymightsomepreferaprixfixe(fixedprice)dinnercostingaboutthesameasanlacarteone(whereyoupayindividua
Some reason why a prix fixed dinner may be preferred is because a prix fixe dinner is a complete meal with several courses
Some people prefer the prix fixe
1. Since capital budgeting decisions involve the estimation of a projects future cash flows and
the rate at which they should be discounted is still a relatively subjective process, the behavioral
traits of managers still affect this process. Discuss this
This file was created by CMPT_IND_RETS using the 201608 CRSP database.
It contains value- and equal-weighted returns for 12 industry portfolios.
The portfolios are constructed at the end of June.
The annual returns are from January to December.
Missing da
Introduction to Financial Econometrics
BUFN 758N
Prof. Rossi
BUFN 758N
Introduction to Financial Econometrics
The Nature and Purpose of Econometrics
What is Econometrics?
Literal meaning is measurement in economics
Definition of financial econometrics: Th
%
% This function estimates the alpha and beta coefficients in univariate
% linear regressions. It also computes the respective standard errors.
%
% INPUTS: - y: vector of dependent variable (Tx1)
%
- x: vector of independent variable (Tx1)
%
(the constan
[F]
Overview
CONCEPTUAL CATEGORY: Functions
Interpreting Functions
Model periodic phenomena with
trigonometric functions.
Interpret functions that arise in
applications in terms of the context.
Extend the domain of trigonometric
functions using the unit c
MODEL INTEGRATED PATHWAY: Model Mathematics III
Overview
Number and Quantity
process of reasoning and explain the
The Complex Number System
reasoning.
Use complex numbers in polynomial
identities and equations.
Understand solving equations as a
Represent
Content Standards
Number and Quantity
The Real Number System
N-RN
Extend the properties of exponents to rational exponents.
1.
Explain how the definition of the meaning of rational exponents follows from extending the properties of
integer exponents to th
MODEL TRADITIONAL PATHWAY: Model Algebra II
(4) Students see how the visual displays and summary statistics they learned in earlier grades
relate to different types of data and to probability distributions. They identify different ways
of collecting datai
Introduction
The fundamental purpose of the Model Geometry course is to formalize and extend students geometric
experiences from the middle grades. This course is comprised of standards selected from the high school
conceptual categories, which were writt
12.
(+) Work with 2 2 matrices as transformations of the plane, and interpret the absolute value of the
determinant in terms of area.
Algebra
Seeing Structure in Expressions
A-SSE
Interpret the structure of expressions.
1.
Interpret expressions that repre
Content Standards
Number and Quantity
The Complex Number System
N-CN
Perform arithmetic operations with complex numbers.
3.
(+)
Find the conjugate of a complex number; use conjugates to find moduli and quotients of complex
numbers.
Represent complex numbe