following the principles of the Expected Utility Theory and making future predictions based on rational information. It assumes there is no element of cognitive bias or sentiment affecting asset prices (O’Keeffe, 2014). The Expected Utility Theorem introduced by Bernoulli (1738) and further developed by Von Neumann and Morgenstern (1947) states that the “decision maker” bases their decision regarding “risky outcomes” solely on their predicted return or “expected utility”, this recognises the risk averse
kind of information? Do we take all the information into account before... ... middle of paper ... ...s have shown that humans are risk averse, and they value loss more than gains from a bet, which means that wealth shows diminishing marginal utility. There is a lot of research work going on in this particular field, more so since the crisis of 2008. The purpose of this article was to make readers aware of the subject .Behavioral finance is an interesting mix of logics, psychology and economics
Utilitarianism is most nearly connected with Jeremy Bentham. The hypothesis known as utilitarianism is just an advancement of basic explanation of Jeremy Bentham that nature has put humanity under the influence of two sovereign bosses torment also delight, it is for them to bring up what we should do, and in addition to focus what we should do. By the guideline of utility said Bentham, "is implied the standard which endorses or dislikes each activity at all, as per the propensity it seems
One of my favorite board games is Monopoly. I have noticed when I’ve played Monopoly that it seems like you always land on certain squares more than others. For instance, it seems like no one ever lands on Boardwalk, and players land on the pink and orange properties more often than they land on the others. The aim of this exploration is to find out if, over the course of a Monopoly game, a player will land on some squares more often than others and to use this information to figure out which properties
Talking about the book value per share it is important to know that market value is a forward looking measure and reflects what investors believe shares are worth while the book value is an accounting measure. Also, if a market value is much higher then there is a bull market, though if book value and market value are close to each other, then financial markets are likely experiencing bear market. Technical Analysis Another approach for stock selection is technical analysis. Levy (1966) stated
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 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
Theoretical background Consumer preference may be described as the subjective tastes, as measured by utility, of various bundles of goods. They permit the customers to rank these bundles of goods according to the levels of utility they give consumer. Outcome of the entire customer preference contains an optimal choice. However it is to be kept in mind that preference by the customer does not dependent on the customer earnings or cost of product it is because capability of consumer to buy does not
unrestricted choice models for Old Saybrook sample. The unrestricted models allow for systematic variations in estimated mean parameter (mean marginal utility) for all attributes except the Cost that are associated with variations in perceived or actual risks of flooding to private homes. Since the econometric model used in the estimation of the utility function is a RPL model, allowing for the main effects interactions with measures of flood-caused risks to private homes would capture the heterogeneity
firms) . Meanwhile, the CAPM is probably the most tested model. The beauty of the CAPM comes from its parsimony and elegance in establishing a linear relationship between risk and return. The CAPM indicates that if an investor wants to obtain a higher expected rate of return, he has to bear additional risk. It is derived on the basis of the mean-variance approach, which is first proposed by Markowitz (1959). The mean-variance approach claims that mean is a proxy of the asset’s return and variance stands
Since the existence of stock markets, people tried to formulate models that reflect and deal as a guideline to understand how markets function. The concept of market efficiency is a major and broadly accepted hypothesis that mainly developed since the formulation of the market efficiency hypothesis by Eugene Fama, in 1970. Although the term market efficiency to economists is also a broadly known term referring to operational efficiency, this paper concentrates on the efficiency of stock markets or
society are not mental disorders unless however, the deviance or conflict results from a dysfunction in the individual as described before (American Psychiatric Association, 2013, p. 20). The diagnosis of a mental disorder should have a clinical utility. Meaning, it should help clinicians to determine prognosis, treatment plans, and potential treatment outcomes for their patients. The diagnosis of a mental disorder is not always a need for treatment, because need for treatment is a complex clinical
DIVIDEND POLICY AT FPL GROUP, INC In 1994 FPL Group, the parent company of Florida Power and Light Company, announced a reduction in its quarterly dividend from $.62 ($2.48 annual) a share to $.42. This was the first-ever dividend cut for a healthy utility, so the company did its best to explain to investors why it had taken such an unusual step. Table 1. ----------------------------------------------------------------------------------------- Year Dividend Earnings Dividend Dividend
mobile payment service was launched in 2012 by Mauritius Telecom in collaboration with the State Bank of Mauritius. The service is branded Orange Money and enables any mobile customer (including Emtel and MTML customers) to effect payment of their utility bills (CEB, CWA, MT fixed Line, Orange Post pay), payment of their income tax and payment for goods and services bought at registered merchants. Orange Money is a bank led model of mobile payment whereby the customer’s bank account is linked to
1. Both Knight and Schumpeter laid great stress on the importance of the entrepreneur. What similarities and differences, if any, do you find in these authors’ conception of the nature and role of the entrepreneur? To Schumpeter, the main function of an entrepreneur is an innovator who induces forward shifts in the market through the improvements which he introduces. Schumpeter classifies innovation under five different types, namely: (1) the creation of a new good or an improvement in the quality
Appealing learners in education expresses the concepts and opinions of students' support in four-component conceptualization: attainment value, an achievement that is attained; intrinsic value, the belonging to something by its nature; utility value, an expected return and risk; and cost, the price of something. In the present paper, motivating students in education is investigated validating that students are motivated in education, and the activities that teachers formulate in their classroom
when prior relevant information (e.g. a picture) was presented to participants, they became better at comprehending than another group which had not been presented a picture. The passage did not make sense without the picture providing context so as expected the other group had
non-sexual appeals in advertisements better. The research hypothesized that the use of the sexual illustration in the advertisement would detract the ability of the receiver than non- sexual appeal (Baker, 1961), which has been expected. In addition, it is predicted that the utility of sexual illustration would get a result of positive attitude, which would also have a higher purchase intention. The result of the examination showed that the receiver would pay more attention on the advertisement execution
SUMMARY FINDING OF ARTICLE 2 : TRANSFORMATIONAL LEADERSHIP Transformational leadership means change the organization, to follow a new vision that can lead not only to survive but also to sustain the successful of the organization. This transformational are need because now days they are many incremental modification or new technology and innovation. In order to be ahead of competitor, organizations are requiring to revamping the organizational cultures to make the changes. (Tichy and Ulrich
First, there was a substantial gender gap in job mobility. Daughters were highly controlled by their parents, who expected them to start repaying their debt much earlier than sons and that required job stability. Sons, on the other hand, were encouraged to experiment on the job market, in order to find better-paying jobs and be able to return more to the family in the