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Factor investment is booming in global asset management, especially environmental, social, and governance (ESG), dividend yield, and volatility factors. In this chapter, we use data from the US securities market from 2003 to 2019 to predict dividends and volatility factors through machine learning and historical data–based methods. After that, we utilize particle swarm optimization to construct the Markowitz portfolio with limits on the number of assets and weight restrictions. The empirical results show that that the prediction ability using XGBoost is superior to the historical factor investment method. Moreover, the investment performance of our portfolio with ESG, high-yield, and low-volatility factors outperforms baseline methods, especially the S&P 500 ETF.

This chapter elaborates on the main factors of the adverse macroeconomic development in Czechia and Europe. Currently, i.e. from 2022, Czechia mainly suffers from double-digit galloping inflation and GDP stagnation. The aim of this chapter is to identify and describe the influence of the main factors from the present and the more distant past on current inflation and approaching stagflation in Czechia. This chapter analyzes an unfavourable mix of demand and supply factors that leave the new banking board of the CNB facing a dilemma, that is, whether to pursue a disinflationary policy of increasing interest rates and thus push the Czech economy closer into recession or to rely on demand-driven economic growth, which will keep unemployment at a low level, but at the same time contribute to inflationary pressures. The new governor of the CNB completely changed the strategy of his predecessor and, despite strong criticism, did not raise interest rates even once. Based on the analysis of inflationary factors, this chapter tries to explain the motives for the Central Bank's new strategy in the fight against inflation, which is the systematic appreciation of the Czech koruna.

This chapter introduces dividend policy as both financial and business decisions. First, it presents the history of dividend payment, definition of dividend, and typical types of dividend. Dividends originate from liquidating payments of sailing vessels in the early 16th century and become popular with the development of corporations. In this book, a dividend is defined as a cash payment to shareholders. By payment time, there are three typical types of dividend including final dividend, interim dividend, and special dividend. Second, it presents definition, important dates, measures, and patterns of dividend policy. Dividend policy includes two decisions: the first is to pay or not to pay dividends, and the second is the dividend magnitude. Investors have to follow important dates of dividend payments in order to make their investment decisions. Important dates include declaration date, record date, ex-dividend date, and payment date. Dividend payout ratio and dividend yield are two common measures of dividend policy. Common patterns of dividend policy are no dividend policy, residual dividend policy, stable dividend policy, and irregular dividend policy. Finally, dividend policy is both financial and business-related decisions. Therefore, dividend decisions are affected by various levels of business environment such as internal, micro (industry), and macro-environment. Dividend theories are the behind mechanisms to explain the effect of each factor in the business environment on corporate dividend policy. Dividend policy, in turn, determines shareholders' wealth through its impact on stock price.

This chapter aims to discuss the challenges facing these countries building productive capacity for development. This chapter makes use of data published by international organizations as indicators for measuring the state of development in the Arab region. Several indicators are presented to compare Arab countries with other world regions. The use of data identifies some of the gaps that countries in the Arab region need to close to strengthen capacity building for development and fostering economic growth. The findings from the data presented reveal that the productive structure in most Arab countries remains weak to generate production linkages and provide incentives for investment in nonenergy sectors. The failure of the export-led growth model to diversify output and promote development in energy producing countries has increased the dependence of these countries on global trade. Fluctuations in commodity prices and uncertainty about global demand for energy have influenced the ability of the state to construct strategies for rapid transformation. Except for the energy sector, the productivity of nonoil sectors remains low reflecting inadequate incentives and ineffective entrepreneurial capabilities. The study examines the challenges for building productive capacity in the Arab world. It illustrates the failure of the led-export model and its inability to prompted economic diversification, especially in the Gulf countries. The study contributes to the literature on capacity building in the Arab world so that to encourage researchers and students of development conducting studies concerning the main development challenges facing these countries.

Purpose: This study investigates internal/own shock in the domestic market and three external volatility spillovers from India, the UK, and the USA to the Sri Lanka stock market.

Need for the Study: The external market’s internal/own shocks and volatility spillovers influence portfolio choices in domestic stock market returns. Hence, it is required to investigate the internal shock in the domestic market and the external volatility spillovers from other countries.

Methodology: This study employs a quantitative method using ARMA(1,1)-GARCH(1,1) model. All Share Price Index (ASPI) is the proxy for the Colombo Stock Exchange (CSE) stock return. It uses daily time-series data from 1^st April 2010 to 21^st June 2023.

Findings: The findings revealed that internal/own and external shocks substantially impact the stock price volatility in CSE. Significant volatility clusters and persistence with extended memory in ASPI confirm internal/own shock in the market. Furthermore, CSE receives significant volatility shock from the USA, confirming external shock. This study’s findings highlight the importance of considering internal and external shocks in portfolio decision-making.

Practical Implications: Understanding the influence of internal shocks helps investors manage their portfolios and adapt to market volatility. Recognising significant volatility spillovers from external markets, especially the USA, informs diversification strategies. From a policy standpoint, the study emphasises the need for robust regulations and risk management measures to address shocks in domestic and global markets. This study adds value to the literature by assessing the sources of volatility shocks in the CSE, employing the ARMA-GARCH, a sophisticated econometrics model, to capture stock returns volatility, enhancing understanding of the CSE’s volatility dynamics.