Journal of
Financial Education

Volume 27                                               CONTENTS                                               Fall 2001

SPECIAL TOPICS

#1 - APPROACHES TO GENERATING IDEAS FOR RESEARCH AND PUBLICATION:
INSIGHTS FROM CONVERSATIONS WITH THE 'ELITE' OF FINANCE

Chee W. Chow, Kamal M. Haddad, Hugh O. Hunter and Carol Venable

This paper reports the findings of interviews conducted with 18 of the most cited and prolific finance authors. Each author shared his personal experiences on the process of generating research ideas, including providing numerous illustrative vignettes. A content analysis of the interviews resulted in a model that provides a way to examine the structure of the idea generation process. Insights by interviewees go beyond general suggestions typically reported in survey-based studies on the topic. The model and insights should be a useful reference for other authors, as well as for guiding students in their quest for ideas and topics.

Pages 1-11

#2 - COOPERATIVE LEARNING: A GUIDE TO RESOURCES FOR THE FINANCIAL EDUCATOR

Carolyn A. Strand, Conni M. Lehmann and Dan W. Hess

In this paper, we provide a unique summary of 56 papers from the accounting, marketing, and management disciplines on group work and classify the research into "how to" (describes a team work technique), and "empirical" (evidence of the effectiveness of a technique). These summaries serve as a useful resource of collaborative learning ideas that the Finance Professor could use in the classroom. Also, implementation of such ideas could act as a springboard for empirical research, testing the effectiveness of the group activities in Finance courses. We also provide suggestions for team learning in the Finance discipline.

Pages 12-28

FINANCE PEDAGOGY

#3 - BUSINESS STATISTICS AND STUDENT PERFORMANCE IN FINANCIAL MANAGEMENT

Leah Marcal and William W. Roberts

This study investigates whether completion of a statistics prerequisite improves student performance in financial management. Regression analysis indicates that students who satisfy the statistics requirement receive higher grades than otherwise identical students. Among students who complete the prerequisite, those with higher statistics grades perform better in finance. Students who delay taking finance more than a few months after completing statistics do not perform as well. However, completion of the statistics requirement does not affect the likelihood of student withdrawal from financial management.

Pages 29-35

#4 - A CITATION-BASED RANKING OF JOURNAL IN FINANCIAL RESEARCH:
SOME NEW RESULTS

Kam C. Chan

This study offers some new journal ranking results that are either different from the literature or have not been explored before. This paper also serves as an update to the literature in this area. Using the citation data in 1998 and 1999 from Journal of Finance (JF), Journal of Financial Economics (JFE), Journal of Financial and Quantitative Analysis (JFQA), and Review of Financial Studies (RFS), I find that JF is consistently ranked the highest in terms of citation proportions and total citation frequency counts over a spectrum of cited time lags. JFE and RFS follow JF as the second and third ranked journals respectively. The second major finding is that I observe a "term structure of citation proportions". It is a pattern of relative citation frequency counts of a journal over various time lags between the publishing time of cited articles and citing journals. From the term structure, I find that finance journals have shorter cited time lags while journals in other supporting disciplines, such as Accounting and Economics, have longer cited time lags. In addition, finance journals, as a group, have a downward sloping term structure while other journals have upward sloping term structures. The difference in cited time lags between finance and other disciplines journals suggests that articles in the supporting disciplines journals usually provide references in methodologies and do not necessarily have an immediate impact on financial research.

Pages 36-52

FINANCE PEDAGOGY

#5 - BINOMIAL INTEREST RATE TREES: A SYNOPSIS OF USES AND ESTIMATION APPROACHES

R. Stafford Johnson, Richard Zuber and John Gandar

The option features embedded in many intermediate and long-term bonds and fixed-income securities have made the binomial interest rate tree approach to bond valuation the standard model for pricing debt securities. This paper reviews how the binomial model is used to price bonds with option features and mortgage-backed securities and how it is estimated.

Pages 53-75

#6 - LINKING THEORY AND PRACTICE: AN ASSET ALLOCATION ASSIGNMENT

Richard J. Kish and Karen M. Hogan

This assignment provides students enrolled in the investment course an opportunity to apply abstract concepts to real world data. Our objective is to describe an asset allocation project and to encourage other instructors to adopt it. Students like the linkage between abstract concepts and the practical nature of the assignment. The formal report write-ups can also be used during job interviews to emphasize the knowledge of basic financial and statistical concepts, as well as, their team working skills. The educational research supports the benefits of this type of exercise when incorporated into the overall classroom experience.

Pages 76-87

FINANCE CASES

#7 - THE CHICAGO BOARD OF TRADE AND ELECTRONIC TRADING:
A CASE ON RESPONDING TO TECHNOLOGICAL CHANGE

Mark E. Holder and Frederick W. Langrehr

The Chicago Board of Trade (CBOT) was founded in 1848 to provide a place for buyers and sellers of agricultural products like corn and wheat to trade futures.1 The Chicago Board of Trade (CBOT) historically traded futures and futures options contracts by the open outcry method. Early in 1999, it lost its position as the worlds highest volume futures exchange to a European competitor that relied on electronic (screen-based) trading. This case looks at the CBOTs environment and resources and relates these to the decisions made and decisions that needed to be made to respond to changing technology and competition.

Pages 88-98