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Article
Publication date: 25 November 2013

Takayasu Ito

This paper aims to analyze Islamic rates of return, conventional interest rates in the Malaysian deposit markets, and Kuala Lumpur Interbank Offered Rate (KLIBOR) rates in…

2305

Abstract

Purpose

This paper aims to analyze Islamic rates of return, conventional interest rates in the Malaysian deposit markets, and Kuala Lumpur Interbank Offered Rate (KLIBOR) rates in the short-term money market from the view point of co-movement and transmission.

Design/methodology/approach

The non-stationary time series models such as cointegration and Granger causality tests are applied to analyze the daily data.

Findings

Islamic rates of return and conventional interest rates co-move in the Malaysian deposit market. The Islamic rates of return propel conventional interest rates in the three-, six-, and 12-month maturities. Islamic rates of return and conventional interest rates form a short-term money market with KLIBOR rates.

Research limitations/implications

The author analyzes econometrically the sample period from May 16, 2005 to January 12, 2012. This paper concentrates on the period after the development of Islamic banking in Malaysia.

Practical implications

Islamic and conventional deposit markets are competitive in Malaysia; in particular, the competition in the one-month deposit market is very keen. Islamic rates of return have more impact on the formation of short-term interest rates than conventional interest rates.

Originality/value

This paper makes three contributions to the related literatures. First, it uses daily data in the maturities of one month, three months, six months and 12 months for its analyses. Second, it uses the Granger causality method of Toda and Yamamoto to avoid the issue of the non-stationarity of the data. The results of the Granger causality tests in this paper are different from related literatures. Third, this paper focuses on the relationship of KLIBOR rates and Islamic rates of return, and of KLIBOR rates and conventional interest rates.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 6 no. 4
Type: Research Article
ISSN: 1753-8394

Keywords

Article
Publication date: 1 August 1993

Shahrukh R. Khan

Identifies an error in the measurement of private rates of returnto aggregate levels of education. When education is viewed as acontinuous variable, the estimated rate of

Abstract

Identifies an error in the measurement of private rates of return to aggregate levels of education. When education is viewed as a continuous variable, the estimated rate of return is to an incremental year of schooling. However, rates of return are often estimated for aggregate levels of education such as the secondary and university levels. When an aggregate level has sub‐levels, such as bachelors′ and masters′ for the university level, the conventional procedure underestimates the rate of return to the aggregate level due to the dominance of up‐front costs in the discounting procedure used to compute rates of return.

Details

International Journal of Manpower, vol. 14 no. 8
Type: Research Article
ISSN: 0143-7720

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Article
Publication date: 1 February 1993

Michael J. Crean

Offers an analytical tool that measures reinvestment rate risk.Expands the knowledge of the concept of reinvestment vis‐...‐vis theinternal rate of return via the external…

Abstract

Offers an analytical tool that measures reinvestment rate risk. Expands the knowledge of the concept of reinvestment vis‐...‐vis the internal rate of return via the external rate of return. Concludes that investors should prefer investments that are less sensitive to reinvestment rate assumption than vice versa.

Details

Journal of Property Valuation and Investment, vol. 11 no. 2
Type: Research Article
ISSN: 0960-2712

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Article
Publication date: 21 August 2019

Petri P. Kärenlampi

The purpose of this paper is to introduce a capital return rate function for growth processes, and apply it to financial sustainability considerations in growing…

Abstract

Purpose

The purpose of this paper is to introduce a capital return rate function for growth processes, and apply it to financial sustainability considerations in growing multiannual plants.

Design/methodology/approach

A partition function of change rate of capitalization is introduced, as well as that of capitalization itself, and the expected value of capital return rate is produced as the ratio of the two functions.

Findings

Financial sustainability significantly differs from maximum-yield sustainability, and does not depend on any external interest rate.

Research limitations/implications

It is proposed that financial considerations should not be based on any arbitrary external interest. Neither should the shape of any yield function be neglected. Constancy of capital return rate in time is not assumed.

Practical implications

Two forestry examples show that the capital return rate is sensitive to rotation time, and in particular to the level of initial investment. The proposed procedure can be applied in the absence of periodic boundary conditions in time.

Originality/value

The methodology has not been applied in this field previously.

Details

Agricultural Finance Review, vol. 79 no. 4
Type: Research Article
ISSN: 0002-1466

Keywords

Article
Publication date: 1 February 1991

Steven S. Armstrong

Highlights the importance of ensuring the highest possible returnrates when using mail surveys. Describes a study investigating thedifference in return rates between a…

Abstract

Highlights the importance of ensuring the highest possible return rates when using mail surveys. Describes a study investigating the difference in return rates between a parent company and a fictitious consulting firm. Reports that there was no difference between response rates for two different return addresses, and that response bias was not a problem. Concludes therefore that great cost savings can be made as a result of developing and mailing the materials in‐house. Summarizes research literature on response rate surveys.

Details

Journal of Services Marketing, vol. 5 no. 2
Type: Research Article
ISSN: 0887-6045

Keywords

Book part
Publication date: 27 November 2017

Thaddeus Sim and Ronald H. Wright

Historical stock prices have long been used to evaluate a stock’s future returns as well as the risks associated with those returns. Similarly, historical dividends have…

Abstract

Historical stock prices have long been used to evaluate a stock’s future returns as well as the risks associated with those returns. Similarly, historical dividends have been used to evaluate the intrinsic value of a stock using, among other methods, a dividend discount model. In this chapter, we propose an alternate use of the dividend discount model to enable an investor to assess the risks associated with a particular stock based on its dividend history. In traditional applications of the dividend discount model for stock valuation, the value of a stock is the net present value of its future cash dividends. We propose an alternative approach in which we calculate the internal rate of return for a stream of future cash dividends assuming the current stock price. We use a bootstrapping approach to generate a stream of future cash dividends, and use a Monte Carlo simulation approach to run multiple trials of the model. The probability distribution of the internal rates of return obtained from the simulation model provides an investor with an expected percentage return and the standard deviation of the return for the stock. This allows an investor to not only compare the expected internal rates of return for a group of stocks but to also evaluate the associated risks. We illustrate this internal rate of return approach using stocks that make up the Dow Jones Industrial Average.

Details

Growing Presence of Real Options in Global Financial Markets
Type: Book
ISBN: 978-1-78714-838-3

Keywords

Article
Publication date: 1 April 2004

Osamah M. Al‐Khazali

This paper investigates the generalized Fisher hypothesis for nine equity markets in the Asian countries. It states that the real rates of return on common stocks and the…

2216

Abstract

This paper investigates the generalized Fisher hypothesis for nine equity markets in the Asian countries. It states that the real rates of return on common stocks and the expected inflation rate are independent and that nominal stock returns vary in a one‐to‐one correspondence with the expected inflation rate. The regression results indicate that stock returns in general are negatively correlated to both expected and unexpected inflation, and that common stocks provide a poor hedge against inflation. However, the results of the VAR model indicate the lack of a unidirectional causality between stock returns and inflation. It also fails to find a consistent negative response neither of inflation to shocks in stock returns nor of stock returns to shocks in inflation in all countries. It appears that the generalized Fisher hypothesis in the Asian markets is as puzzling as in the developed markets.

Details

Journal of Economic Studies, vol. 31 no. 2
Type: Research Article
ISSN: 0144-3585

Keywords

Abstract

Details

Dynamic General Equilibrium Modelling for Forecasting and Policy: A Practical Guide and Documentation of MONASH
Type: Book
ISBN: 978-0-44451-260-4

Abstract

Details

Broken Pie Chart
Type: Book
ISBN: 978-1-78743-554-4

Article
Publication date: 1 March 1989

Nanda Nanthakumaran

Examines the problem of multiple solutions in relation to the useof the internal rates of return (IRR) as a decision‐making criterion.Attempts to show that positive…

Abstract

Examines the problem of multiple solutions in relation to the use of the internal rates of return (IRR) as a decision‐making criterion. Attempts to show that positive multiple IRRs occur only in a limited number of cases and in such cases the IRR is not the appropriate measure of return. Argues instead that the true rate of return for such projects is shown to be dependent on the cost of capital. Suggests two methods to deal with this problem: the extended yield method and the return on invested capital method.

Details

Journal of Valuation, vol. 7 no. 3
Type: Research Article
ISSN: 0263-7480

Keywords

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