Journal of
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Volume 33 CONTENTS Summer 2007 |
SPECIAL TOPICS
An Application in Experiential Learning: Developing an Intercollegiate Investment Research Competition
Therese E. Pactwa, K. Matthew Wong and Keith M. Moore
There have been a number of articles researching issues in experiential education such as internship, field studies, and classroom projects. This paper further contributes to the expanding literature by reporting the unique experience of St. John’s University in working with other colleges and a professional organization to design an experience-based education model from scratch. In conjunction with these outside institutions, we developed an annual intercollegiate competition in equity analysis. This paper discusses the constant struggle to balance among opposing institutional objectives. As an educational experience in creating a new educational model, it has been invaluable to the authors. We seek to share our experiences with other faculty members who want to implement a similar experience-based educational component in their respective programs.
Pages 1-21
FINANCE PEDAGOGY
Real Time Foreign Exchange Data Modeling in International Economics and Finance
Richard D. Holowczak
International economics and finance topics are taught in most undergraduate and MBA programs throughout the world. Many of the common theories introduced in such courses lend themselves to demonstration using spreadsheets. Populating the spreadsheets with real-time data from professional data vendors provides students with an opportunity to explore international economics and finance topics in an exciting and very real fashion. This paper presents exercises using real time data from Reuters to develop and explore effective cross rates, triangular arbitrage, covered interest arbitrage and forward rate quote spread models.
Pages 22-35
Adding Animation and Interactivity to Finance Courses with Learning Objects
Ernest N. Biktimirov and Linda B. Nilson
In this paper we explain and assess the benefits of integrating an interactive, online learning object into a finance course. Animation and interactivity combined with the accessibility of the online learning object create a rich, student-controlled learning environment. We present a new learning object on portfolio expected return, risk, and diversification and measure its effect on student learning in an introductory finance course. Our findings indicate that using the learning object seems to improve the performance of low-GPA students.
Pages 36-48
A Pedagogy that Elevates the Learning of Introductory Investments
Frederick P. Schadler
How should a course in investments be structured to optimize preparation of the student for the outside world? This paper addresses this question by using existing research to identify what are considered to be the most effective pedagogies for learning, and by testing one approach in an investments topics class. The learning effectiveness of the course appeared to be very high. This outcome was expected given the fact that the course content coincided closely with the higher effective learning models for finance students. The pedagogy used in the class was designed to "raise the learning bar" in the class from the lower levels of cognitive learning known as knowledge and comprehension, to the higher levels of learning, known as, analysis, synthesis, and evaluation. The main content covered irrational behavior and the identification and evaluation of value, growth, and momentum stocks. Technical analysis of securities was also incorporated into the analysis segment.
Pages 49-63
A Simple Model of Interest Rate Term Structure for the Classroom
Tom Arnold
Without much technical expertise, a yield curve model is presented that is very dynamic and can be easily programmed in Excel for classroom presentation or for assignments. By using the output of the model to have students find embedded rates within the yield curve, a discussion of how bond traders speculate on interest rates emerges very easily. Further, the model output can also be used for numerous exercises including the pricing of strips or for evaluating the positions of an entire bond portfolio. Within the exercises, the dynamic nature of the model can be exploited to provide sensitivity analysis.
Pages 64-72
Comparison of Features and Benefits of Finance Websites and Their Potential Applications in Various Finance Courses
Susan J. Crain, Gay A. Ragan and Kent P. Ragan
The purpose of this paper is to provide the reader with an "at-a-glance" comparison of the features of several popular online finance websites. We focus on two typical uses of online sites—portfolio management and individual stock research. We discuss the benefits of select features related to those two tasks, provide an example assignment that incorporates those tasks, and give suggestions for possible implementation across several finance courses within the typical finance curriculum.
Pages 73-80
FINANCE CASES
McCall Oil Incorporated: Cash Flow v. Free Cash Flow Analysis
James M. Tipton and Ernest S. Fletcher, Jr.
There are two very common approaches which management can use to manipulate reported earnings: (1.) accrual accounting and (2.) profit leakages ("frictions"). Most financial case studies focus on the problems associated with converting accrual accounting to cash accounting. This case, however, focuses on the problems of finding "leakages" in the cash flow model. It is more concerned with the longer run manipulation (adjustments to the level, or endowment, of the free cash flows) for the steady state valuation model than the shorter term manipulation of the trend line, or volatility of the trend line, by the use of accrual accounting.
Pages 81-101