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The purpose of this paper is to conduct an empirical analysis of the pattern of time value decay in listed equity options, considering both call and put options and different moneyness and maturity levels.

The research design is empirical, with great attention paid to creating a standardized measure of time value that can be both tracked over time for an individual option contract and meaningfully compared across two or more different option contracts.

The author finds that moneyness classification at the beginning of the holding period is the key determinant of the pattern of subsequent time decay. The type of option, call or put, and the maturity of the contract have surprisingly little relevance to the pattern of time decay “out-the-money contracts having similar patterns on average, regardless of whether they are calls or puts, 30-day or 60-day contracts.” More detailed analysis reveals that In-the-money and out-the-money contracts have slow time decay for most of the contract life, with a significant percentage of the time decay concentrated on the final day of the option. At-the-money contracts experience strong decay early in the life of the option.

The study is limited by not having intra-day data included to analyze more frequent price movements.

The results reported in the paper provide insight into issues of active management facing options traders, specifically choices such as the initial maturity of the option contract and rollover frequency.

Very few studies examine the important issue of how option time value behaves. Time value is the subjective part of the option contract value, and therefore very difficult to predict and understand. This paper provides insight into typical empirical patterns of time value behavior.

Purpose − The purpose of this paper is to review an explanation for the causes of the stock market crash in 1987, update the empirical support for that argument, and compare to recent market developments. Design/methodology/approach − While the market crash on October 19, 1987 was the largest one‐day S&P 500 drop in percentage terms in history (20.47 percent) there was also a large market drop (10.12 percent) in the three trading days before the 1987 crash. Previous research has shown show that the three‐day decline was the largest in more than 40 years, large enough that the drop was news itself (the October 16, 1987 drop immediately before the crash was also an extremely large one‐day decline). The theoretical model of Jacklin et al. show how a surprise significant drop in the market could have provided information to the market that could directly lead to an immediate crash. Findings − The paper follows the stock market for 20 years after 1987, and finds the magnitude of the market decline immediately preceding October 19, 1987 was still a significant outlier − only one three‐day period in the 20 years after 1987 had as large a market decline. The paper documents the large market movements and volatility in the period beginning in fall 2008 and suggests that this “crash” is different than what occurred in 1987. Research limitations/implications − This paper's main limitations lie in the implications drawn about the causes of the 2008 crash. Practical implications − This paper provides evidence on the causes of the 1987 crash and implications for the 2008 decline. The 1987 crash was due in part to characteristics news but also to the market and trading strategy, the 2008 “crash” is more likely a response to fundamental economic news. Originality/value − This paper uses empirical evidence since 1987 to look back on the causes of the 1987 crash.

The purpose of this paper is to investigate the extent to which introduction of ETFs reduces short‐sale constraints in their constituent stocks.

First, the introduction of ETFs increases short interest for stocks that they hold. Second, the increase in short interest is highest for the stocks that were most short‐sale constrained. Third, subsequent additions of a stock to an ETF will have a lesser impact on short interest than the first time additions. Finally, using matched control sample and regression analysis approaches, the authors make sure that their results are robust to determinants of short‐selling activity which extant research has found to be relevant.

When a stock is included in an ETF for the first time, the paper finds that the average monthly short‐selling activity of the stock in the six months following ETF‐inclusion is, on average, 33 percent higher than that in six months prior to the inclusion. This effect is the strongest for stocks that are most short‐sale constrained. The analysis of subsequent additions of stocks to ETFs reveals that the effect of increased short‐selling activity is significantly attenuated when compared to the first‐time additions. All of the findings are robust to the matched sample comparisons and multiple regression analysis that account for determinants of short‐selling activity.

This paper shows that: the introduction of ETFs helps relax short‐sale constraints in the market; that the extent to which a stock's outstanding shares are held by one or more ETFs serves as a proxy for the degree to which stocks are short‐sale constrained; and implies that the introduction of ETFs makes the prices of the funds' underlying securities more efficient.

This study aims to examine a large, non-disclosed production contract awarded to Lockheed Corp. in the context of a trade-off between a contractually required non-disclosure clause and the need (as a publicly traded firm) to disclose material information to its shareholders. This production contract generated significant cash flows to the firm as evidenced by growth in its earnings. However, the existence of the production contract and its contribution to Lockheed’s earnings, was not disclosed by the firm to shareholders and potential investors while the production contract was being executed.

The authors examine the market reaction to several key contract events which were not disclosed at the time they occurred, in compliance with the contractually required non-disclosure clause.

A statistically significant stock price reaction around the time of the award of this non-public contract, indicative of trading by some capital market participants using non-public information was documented.

Because similar large non-public contracts funded by the government are common in the industrial economy, we conclude by discussing implications for organizational structure, firm’s cost of capital, equity-based compensation and market efficiency.

Australia's early adoption of international financial reporting standards (IFRS) in 2005 was influenced by the argument that the quality of financial reporting would be improved as a result. The purpose of this paper is to provide an historical review of quality in relation to financial reporting in Australia by investigating how the qualitative characteristics of relevance, reliability, comparability and understandability developed in Australia between 1961 and 2004.

This paper reviews the relevant academic and professional literature during the period as well as reporting on a survey of academics and others who contributed to debates about the characteristics of accounting.

In Australia the notion of “quality” can be captured by relevance, reliability, comparability and understandability although the names and descriptions of these elements have been debated over a 40‐year period. The paper contends that the exact meanings of those elements in relation to financial reporting remain unresolved, in spite of their adoption by the AASB Framework (2004) as the qualitative characteristics of accounting information.

Future research into the qualitative characteristics in Australia, which include questions such as the extent to which certain reporting practices or standards meet the requirements of one or more of the qualitative characteristics could be based on the historical development of these characteristics, as described in this paper. This paper also identifies critical areas that require further dialogue between researchers, standard setters and users of general purpose financial statements.

This paper describes links between a comprehensive list of attributes of accounting information that have been considered important over the past 40 years, and the four qualitative characteristics adopted by the AASB Framework. It also provides a history of contemporary accounting dilemmas, and reveals a lack of resolution to issues associated with each of the qualitative characteristics.

The role of chief executive officer (CEO) personal characteristics in shaping corporate policies has attracted increasing academic attention in the past two decades. In this review, the authors synthesize extant research on CEO attributes by reviewing 232 articles published in 29 journals from the accounting, finance and management literature. This review provides an overview of existing findings, highlights current trends and interdisciplinary differences in research approaches and identifies potential avenues for future research.

To review the literature on CEO attributes, the authors manually collected peer-reviewed articles in accounting, finance and management journals from 2000 to 2021. The authors conducted in-depth analysis of each paper and manually recorded the theories, data sources, country of study, study period, measures of CEO attributes and dependent variables. This procedure helped the authors group the selected articles into themes and sub-themes. The authors compared the findings in various disciplines and provided direction for future research.

The authors highlight the role of CEO personal attributes in influencing corporate decision-making and firm outcomes. The authors categorize studies of CEO traits into three main research themes: (1) demographic attributes and experience (including age, gender, culture, experience, education); (2) CEO interactions with others (social and political networks) and (3) underlying attributes (including personality, values and ideology). The evidence shows that CEO characteristics significantly affect a wide range of specific corporate policies that serve as mechanisms through which individual CEOs determine firm success and performance.

CEO selection is one of the most crucial decisions made by corporations. The study findings provide valuable insights to corporate executives, boards, investors and practitioners into how CEOs’ personal characteristics can impact future firm decisions and outcomes that can, in turn, inform the high-stake process of CEO recruitment and selection. The study findings have significant practical implications for corporations, such as contributing to executive training programs, to assist executives and directors attain a greater level of self-awareness.

Building on the theoretical foundation of upper echelons theory, the authors offer an integrated theoretical framework to consolidate existing empirical research on the impacts of CEO personal attributes on firm outcomes across accounting and finance (A&F) and management literature. The study findings provide a roadmap for scholars to bridge the interdisciplinary divide between A&F and management research. The authors advocate a more holistic and multifaceted approach to examining CEOs, each of whom embodies a myriad of personal characteristics that comprise their unique identity. The study findings encourage future researchers to expand the investigation of the boundary conditions that magnify or moderate the impacts of CEO idiosyncrasies.

The purpose of this chapter is to describe the Universal Design for Learning (UDL) framework and explore ways UDL decreases potential barriers for diverse students while increasing opportunities to learn. The sociocultural theory of Lev Vygotsky (1978) serves as a theoretical framework for UDL. Vygotsky (1978) placed much emphasis on the role of the social interaction in the development of cognition stating, “Every function in the child’s cultural development appears twice: first, on the social level, and later, on the individual level” (Vygotsky, 1978, p. 57). Additionally, he focused considerable attention on language and private speech. The ability to express oneself in any environment, particularly the classroom, is critical to intellectual development. Another pivotal concept is that of the Zone of Proximal Development (ZPD), which reflects the point between what a child has previously learned and can complete independently and that which they cannot do, even with supports. Our intent was to use student examples, or case studies, of typical diversity in the classroom, to demonstrate the application of UDL principles. Specifically, we provide ways planning for representation of material, expression of material, and engagement in material, which can benefit all learners. The case study examples demonstrate ways effective planning can benefit learners in many areas. The case studies presented in this chapter reflect a small portion of the diverse population in classrooms across the nation. Yet the case studies demonstrate ways planning can incorporate students “in the margin” while at the same time benefitting all students in the classroom. Addressing diversity through the UDL lens helps teachers accommodate individual differences through intentional instructional design, while at the same time providing resources for all students in the classroom.

In this chapter, we review recent work examining the influence individual executive characteristics exhibit on acquisition behavior, often in service of their private interests. In doing so, we outline the findings of this limited research, explore possible alternative explanations and factors, and discuss several novel data collection and methodological techniques that scholars have advanced in the upper echelon context, in recent years. As we discuss, we believe that researchers can more fruitfully explore the underlying personal, psychological, and social factors that motivate acquisition activity, by augmenting current techniques with these methodological innovations.