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The purpose of this paper is to investigate how to determine optimal investing stopping time in a stochastic environment, such as with stochastic returns, stochastic interest rate and stochastic expected growth rate.

Transformation method was used for solving optimal stopping problem by providing a way to transform path‐dependent problem into a path‐independent one. Based on option pricing theory, optimal investing stopping time was thought of as an optimal executed timing problem of American‐style option.

First, the authors transform a path‐dependent stop timing problem to a path‐independent one with transformation under very general conditions, to directly use the existing conclusion of optimal stopping time literature. Second, when dynamics of capital growth is homogeneous, the authors changed the two dimensional optimal stop timing problem into a single dimension problem based on the assumption of zero exercise costs. Third, the authors investigated the comparative dynamics about asset selling boundary on asset value, state variable and return predictability. With constant discount rate and growth rate, the optimal selling timing depends on the simple comparison between capital cost and growth rate.

The paper's contributions to analysis method may be as follows. The authors demonstrate how to transform a path‐dependent stopping problem into a path‐independent one under general conditions. The transform method in this article can be applied to other path‐dependent optimal stopping problems. In particular, a Riccati ordinary differential equation for the transformation is set up. In most examples commonly met in finance, the equation can be solved explicitly.

This study investigates the impact of the enhanced continuous disclosure regime introduced in December 2002 on several measures of information risk in NZX‐listed stocks. We employ two microstructure models and an intraday data set to measure information risk in a sample of 71 stocks. Our empirical results show that the reforms enacted in December 2002 had no significant effect on either the level of information‐based trading or the adverse selection component of market spreads in our sample of NZX‐listed stocks.

This paper tests two moving average technical trading rules for four Asian markets. Our results indicate that moving average rules do indeed have predictive power and can discern recurring price patterns for profitable trading. Moreover, our results support the hypothesis that technical trading rules can outperform the buy‐and‐hold strategy. Break‐even one‐way trading costs are estimated to be high for all four markets. To confirm the test outcome, robust tests based on bootstrap and the related t‐tests among the markets are also carried out. We conclude from the statistical results that moving average rules are valid and indeed have predictive power. It is implied that the trading rules may be used to design a trading strategy that will beat the buy‐and‐hold strategy in the Hong Kong, Singapore, South Korea, and Taiwan markets. The contribution of the current study is that this is the first validation test of trading rules using four markets at a similar development stage and culture tradition; and in the tests, we use most current and longer periods than the periods used in previous literature. Our robust tests are unique and considered distribution‐free.

Analyzing how the post-Soviet transition interacts with the crisis of market finance exhibits a new “greed-based economic system” in the making. Asset grabbing is at its core and hinders capital accumulation. All the various privatization schemes have triggered off asset grabbing, asset stripping, and asset tunneling. A global contagion of such behavior has spread the power and cohesion of managers/shareholders (oligarchs) worldwide. Financial asset grabbing is less straightforward, though much widespread, and operates in financial markets through new financial products, securitization, firms buying their own shares, hedge funds, stock price manipulation, short selling, and the distribution of stock options.Shadow banking, and more generally a global informal economy, results from grabbing strategies in financial markets that breach the formal rules of capitalism. In alleviating and circumventing the rules, the oligarchy paves the way for economic malpractices and crime, calling capitalist laws into question.In such context, systemic greed underlies unconstrained maximization of relative wealth, for which asset grabbing is a rational means, in a winner-take-all economy. At the present stage of our research, a greed-based economy cannot yet be theoretically defined as a transition either to a new phase of capitalism or to another different system.

To investigate the performance of moving average trading rules in an emerging market context, namely that of the Jordanian stock market.

The conditional returns on buy or sell signals from actual data are examined for a range of trading rules. These are compared with conditional returns from simulated series generated by a range of models (random walk with a drift, AR (1), and GARCH‐(M)) and the consistency of the general index series with these processes is examined. Sensitivity analysis of the impact of transaction costs is conducted and standard statistical testing is extended through the use of bootstrap techniques.

The empirical results show that technical trading rules can help to predict market movements, and that there is some evidence that (short) rules may be profitable after allowing for transactions costs, although there are some caveats on this.

New results for the Jordanian market; use of sensitivity analysis to investigate robustness to variations in transactions costs.

Sees the objective of teaching financial management to be to help managers and potential managers to make sensible investment and financing decisions. Acknowledges that financial theory teaches that investment and financing decisions should be based on cash flow and risk. Provides information on payback period; return on capital employed, earnings per share effect, working capital, profit planning, standard costing, financial statement planning and ratio analysis. Seeks to combine the practical rules of thumb of the traditionalists with the ideas of the financial theorists to form a balanced approach to practical financial management for MBA students, financial managers and undergraduates.

The purpose of this paper is to take advantage of a natural experiment in Taiwan to test the effect of short‐sales constraints on price dynamics.

Since September 1998, short‐selling is banned at a price below the close price of the previous trading day. The new rule creates unique daily dynamics of short‐sales constraints. The paper employs a difference‐in‐difference method to evaluate whether the short‐sales constraint rule plays an important role in the price dynamics.

The results show that stock prices react to information in a way similar to if short‐selling was not banned. This is in line with the implication of a rational expectation framework like Diamond and Verrecchia.

The paper has implications on the short selling bans in the 2008/2009 credit crisis and the European debt crisis because the bans are public information as those in this setting. The rational agents in the market could incorporate the bans into price beliefs which could lead to the ineffectiveness of the policy. The short‐sales constraints may be widely imposed in the crisis but they are not the effective tools to alleviate downward price pressures.

The results suggest that the effort of the government to boost stock price by imposing short sales constraints will not be effective if rational investors take the constraints into account while forming their beliefs.

Unlike existing short‐sales constraint proxies like short interest or lending fees, the dynamic constraints do not suffer from endogeneity. Moreover, the constraints are public information and thus ideal for testing the rational expectation models, in which investors have to be aware of the level of the constraints.

The purpose of this paper is to examine the efficacy of recent policy initiatives taken by the US Securities and Exchange Commission banning naked “short‐selling” of specific financial stocks. The paper also considers the merits of reinstating “uptick rule” 10a‐1, which prohibits short‐selling securities on a downtick.

The paper studies theoretical implications of short‐selling in a simple state‐claim model, reflecting varying amounts of short interest in a representative firm and noise trading in the market. Price discovery depends on the proportion of noise trading compared to rational short‐selling. The empirical analysis focuses on price volatility under short‐selling constraints employing simple regressions, EGARCH analysis and simulated price behavior under a hypothetical uptick rule.

The EGARCH results suggest short‐selling constraints had non‐uniform impacts on the persistence and leverage effects associated with price volatility. The corresponding price simulations indicate a hypothetical uptick rule might have helped stabilize price behavior in some cases, depending on the nature of the stochastic process and whether or not quantity constraints on short‐selling are binding.

The theoretical arguments and empirical findings suggest a “focused approach” to market regulation would be a more efficient means of discouraging trend chasing without compromising “informed trading” – that is to say, safeguarding price discovery and market liquidity without impeding arbitrage or confounding probability beliefs regarding firm survival. These conclusions are largely in accord with recent policy analysis and proposals outlined in Avgouleas.

The last decade of the prior millennium witnessed many revolutionary, not evolutionary, changes in the way business is done and information is exchanged globally. The Internet has changed and speeded up the ways we exchange and use information and the time necessary for doing so. This revolution has the potential to reshape the world we live in; to draw us closer together in a global community; and to allow businesses to sell products and services and to raise capital on a global basis simultaneously. Instantaneous satellite transmission of television news coverage informs us of critical events, including financial developments, in distant lands. E‐mail allows us to establish business and personal relationships and communicate ideas rapidly with foreign individuals. And we have also seen increased interest among businessmen and others in investing capital in foreign nations and in the securities of companies publicly traded in foreign or international markets. The Internet allows investors to create ‘chat rooms’ to exchange information and ideas about issuers.

The purpose of this paper is to empirically test information asymmetry and agency conflicts hypotheses, as to firm's choices in selling preferred stock in public and private markets.

Using firm‐level preferred stock issue data, the author uses a multivariate logistic model to see a firm's different preferred stock selling decisions among public market, rule 144A market, and non rule 144A market. The paper examines the impact of the firm's idiosyncratic risk and cash flow volatility.

It is found that private placement (non rule 144A) firms have higher information asymmetry than public offering firms. In addition, private placement (rule 144A) firms have higher operating risk than public offering firms. The non Rule 144A market and rule 144A market for preferred stocks are significantly different.

This topic can be further studied with more detailed, preferred stock issue data.

The paper extends our understanding of the preferred stock market selling mechanism.