Market price uncertainty, risk aversion and procurement: Combining contracts and open market sourcing alternatives

2017 ◽  
Vol 185 ◽  
pp. 34-51 ◽  
Author(s):  
Santosh Mahapatra ◽  
Shlomo Levental ◽  
Ram Narasimhan
Keyword(s):  
Risk Aversion ◽  
Market Price ◽  
Open Market ◽  
Price Uncertainty

scholarly journals STUDI PRAKTIK EARNINGS MANAGEMENTPADA PERUSAHAAN YANG MELAKUKAN INITIAL PUBLIC OFFERINGDI BURSA EFEK JAKARTA

2016 ◽  
Vol 5 (3) ◽  
pp. 313
Author(s):  
Akhmad Riduwan
Keyword(s):  
Initial Public Offering ◽  
Market Price ◽  
Open Market ◽  
Price Information ◽  
Public Offering

Saat melakukan penawaran saham perdana (Initial Public Offering atau disingkat IPO) adalah saat yang penting bagi perusahaan. Harga perdana saham mempunyai dampak yang signifikan terhadap perusahaan yang mengeluarkan sekuritas (issuers). Kas yang diperoleh dari pasar perdana ini, oleh issuersdapat dinikmati secara langsung. Hasil penjualan saham masuk ke perusahaan sebagai dana segar yang bisa tak terbatas jum-lahnya dibandingkan surat hutang, tergantung pada prospek perusahaan di masa men-datang di mata investor. Seringkali harga perdana ditetapkan berdasarkan informasi non harga (non-price information). Metode yang paling lazim digunakan underwriters dan investor untuk menilai saham perdana adalah dengan menggunakan pendekatan perusa-haan-perusahaan yang dapat diperbandingkan (comparable-firms approach). Pendekat-an ini menggunakan price-earning ratioperusahaan-perusahaan yang dapat diperban-dingkan sebagai penentu awal (yang dianggap mewakili open market price) untuk kemu-dian dikalikan dengan earnings perusahaan yang akan menawarkan saham perdananya. Oleh karenanya, informasi earnings yang disampaikan sebelum perusahaan menawarkan saham perdananya memegang peranan yang sangat penting untuk mendongkrak harga saham perdana.Alasan di atas cukup kuat untuk sampai pada dugaan bahwa issuers mungkin saja mela-kukan earnings managementdengan meninggikan laba dan melaporkannya pada infor-masi yang dipublikasikan sebelum penawaran saham perdananya untuk mendapatkan insentif dari pasar modal. Kajian tentang hal tersebut memberikan bukti bahwa manajer mengatur earnings pada saat mendekati penawaran perdana (penelitian oleh Friedlan 1994, Shivakumar 2000).Kebanyakan investor yang menggunakan informasi pada prospektus sebagai satu-satunya sumber informasi yang mudah dan murah, akan sangat mudah terpengaruh oleh pilihan-pilihan kebijakan akuntansi issuers dalam rangka earnings management.Penelitian ini mengkaji kemungkinan perusahaan-perusahaan yang melakukan penawar-an saham perdananya di Bursa Efek Jakarta mengatur earnings sedemikian rupa dan meng-informasikannya melalui prospektus dengan tujuan mencapai harga perdana yang setinggi-tingginya. Setelah itu, perusahaan mengembalikan earnings ke tingkat semula.

A Prospect Theory Explanation of the Disposition to Trade Losing Investments for Less Than Market Price

2002 ◽  
Vol 90 (3) ◽  
pp. 851-857
Author(s):  
D. J. Johnstone
Keyword(s):  
Prospect Theory ◽  
Market Price ◽  
Market Value ◽  
Mental Accounting ◽  
New Venture ◽  
Open Market ◽  
Psychological Benefits ◽  
Sale Price ◽  
Monetary Loss ◽  
Mental Integration

Investors have a proven general reluctance to realize losses. The theory of “mental accounting” suggests that losses are easier to accept when mentally integrated with either preceding losses or with compensatory gains. Mental integration is made easier when a failed asset is exchanged against a new, apparently profitable, acquisition. The alternative is to sell the existing asset on the open market before re-investing the proceeds as desired. This is emotionally less appealing than “rolling over” a losing investment into a new venture by way of an asset trade. The psychological benefits of exchanging rather than selling a failed asset come at a cost. It is typical of trade-in arrangements, e.g., where one trades an old car against a new one, that the effective sale price of the existing asset is less than current market value. Acceptance of this low price adds to the investor's total monetary loss on the existing asset but is essential to an overall package deal apart from which that asset would often remain belatedly unsold.

scholarly journals A Model of Monetary Transmission Mechanism

2020 ◽  
Author(s):  
Yuuki Maruyama
Keyword(s):  
Interest Rate ◽  
Lower Bound ◽  
Risk Aversion ◽  
Risk Premium ◽  
Market Price ◽  
Zero Lower Bound ◽  
Government Bonds ◽  
Total Investment ◽  
The Interest Rate ◽  
Interest Rate Channel

The point of this model is that total investment in the economy is not determined by the equilibrium of the interest rate alone, but by the equilibrium of both the interest rate and the market price of risk (risk premium). In this model, the lower the discount rate or risk aversion of people, the higher the total investment. This model shows that when the interest rate is not at the zero lower bound, the total investment is only slightly affected by people's risk aversion, but at the zero lower bound, the total investment is inversely proportional to people's risk aversion. In addition, this model is used to analyze monetary policy. It is shown that the interest rate channel and the credit channel can be analyzed with the same formula and the effect of the interest rate channel is small. This explains why a central bank can greatly increase the total investment with small changes in the interest rate. Additionally, this paper analyzes fiscal policy, helicopter money, and government bonds.

Tariffs versus Quotas under Market Price Uncertainty

2006 ◽  
Vol 142 (1) ◽  
pp. 181-194 ◽  
Author(s):  
Hung-Yi Chen ◽  
Hong Hwang
Keyword(s):  
Market Price ◽  
Price Uncertainty

scholarly journals General theory of geometric Lévy models for dynamic asset pricing

2012 ◽  
Vol 468 (2142) ◽  
pp. 1778-1798 ◽  
Author(s):  
Dorje C. Brody ◽  
Lane P. Hughston ◽  
Ewan Mackie
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Risk Aversion ◽  
Foreign Exchange ◽  
Market Price ◽  
Nonlinear Function ◽  
Rate Of Return ◽  
Pricing Kernel ◽  
Kernel Approach ◽  
The Interest Rate

The geometric Lévy model (GLM) is a natural generalization of the geometric Brownian motion (GBM) model used in the derivation of the Black–Scholes formula. The theory of such models simplifies considerably if one takes a pricing kernel approach. In one dimension, once the underlying Lévy process has been specified, the GLM has four parameters: the initial price, the interest rate, the volatility and the risk aversion. The pricing kernel is the product of a discount factor and a risk aversion martingale. For GBM, the risk aversion parameter is the market price of risk. For a GLM, this interpretation is not valid: the excess rate of return is a nonlinear function of the volatility and the risk aversion. It is shown that for positive volatility and risk aversion, the excess rate of return above the interest rate is positive, and is increasing with respect to these variables. In the case of foreign exchange, Siegel's paradox implies that one can construct foreign exchange models for which the excess rate of return is positive for both the exchange rate and the inverse exchange rate. This condition is shown to hold for any geometric Lévy model for foreign exchange in which volatility exceeds risk aversion.

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