Derivative disclosures and managerial opportunism

Derivatives are increasingly used by managers not only to hedge risks but also to pursue non-hedging activities for fulfilling opportunistic incentives. The Statement of Financial Accounting Standards No.161 (SFAS 161) requires firms to disclose their objectives and strategies of using derivatives. Using the adoption of this standard, we examine whether and how derivative disclosures influence managerial opportunistic behavior. We employ insider trades and stock price crash risk to capture managerial opportunism. Applying a difference-in-differences research design with hand-collected data on derivative designations, we find that, after the implementation of SFAS 161, derivative users that comply with SFAS 161 experience a significantly greater decrease in both insider trades and stock price crash risk, compared with a matched control sample of non-derivative-users. We further provide evidence to suggest that SFAS 161 curbs managerial opportunism via reducing information asymmetry between corporate insiders and outside investors and enhancing the effectiveness of derivative hedging

Numerical modeling and simulation of the electric breakdown of rocks immersed in water using high voltage pulses

Selective breakdown of mineralized particles by using high-voltage pulses (HVP) has been reported, yet its mechanisms are not fully understood, and the HVP setting factors affecting its efficacy in ore pre-concentration for the mining industry are not established. This study investigates the electro-dynamic mechanisms of electric breakdown by using the time-transient dielectric breakdown model and the finite-difference numerical method. Monte-Carlo method with random sampling is applied to calculate breakdown probabilities. The model and the selected parameters have been validated by the published experimental data of the electric breakdown of mineralized synthetic particles. The simulations of pulse rising time from 150\ua0ns to 1\ua0μs showed that the HVP breakdown threshold of rock particles gradually increased as the pulse rising time decreased. This suggests that to minimize the mis-breakdown of barren rocks in the HVP-enabled ore pre-concentration application, it is important to use a generator with a short pulse rising time. Shorter pulses also led to a higher probability of the internal breakdown of the mineralized particles. The simulations indicate that inhomogeneity of conductivity in an ore particle caused the streamers to bend toward the area of inclusion with high conductivity in a host rock matrix, which increased the probabilities of the breakdown of this mineralized particle. This phenomenon was more pronounced as conductivity rose. High-conductivity inclusions can reduce the minimum voltages required for the breakdown of the mineralized particles