Artificial Neural Network Enhanced Parametric Option Pricing

In this paper we explore ways that alleviate problems of nonparametric (artificial neural networks) and parametric option pricing models by combining the two. The resulting enhanced network model is compared to standard artificial neural networks and to parametric models with several historical and implied parameters. Empirical results using S\&P 500 index call options strongly support our approach.Option pricing, implied volatilities, implied parameters, artificial neural networks, optimization

A Critique of the Agency Theory Viewpoint of Stock Price Crash Risk: The Opacity and Overinvestment Channels

This study documents a puzzling historical trend in crash risk for US‐listed firms: between 1950 and 2019, the firm‐year occurrences of idiosyncratic stock price crashes rose from 5.5% to an astonishing 27%. The vastness of the literature notoriously attributes crashes to agency reasons, i.e. self‐interested executives who strategically camouflage bad news via the financial reporting opacity and overinvestment channels. Nonetheless, we document that the opacity– and overinvestment–crash relations are non‐significant, especially in the period following the enforcement of the Sarbanes–Oxley Act. The statistically non‐significant relations are also witnessed in tests that account for the effect of equity‐based compensation incentives and corporate governance functions. Overall, this study criticizes the efficacy of opacity and overinvestment as channels in explaining crash risk. Our conclusions offer avenues for future research to pursue in rationalizing the puzzling surge in stock price crashes

Diffuse precordial ST-segment elevation in inferior-right myocardial infarction

A right ventricular (RV) myocardial infarction (MI) may yield precordial ST-segment elevation (STE). Accordingly, combined inferior and precordial STE may be produced during an inferior-RV MI. Such an electrocardiographic picture may be mistakenly regarded as showing wrapped left anterior descending artery (LADA) occlusion or double vessel occlusion. We present a patient with inferior-RV MI and STE in the inferior, all precordial and right chest leads, in whom the diffuse precordial STE was probably mistakenly regarded as showing anterior MI. However, the STE resolution in V1-V2 and late R’ wave in V1, which were combined with a recanalized RV branch, favored the RV origin of this STE. Furthermore, the LADA was patent when V3-V6 showed severe ischemia, while its lesion was angiographically stable. Thus its simultaneous occlusion was unlikely. The late R’ wave in V1 indicates RV transmural conduction delay;as highlighted herein, it is diagnostic of a RV myocardial infarction. (Cardiol J 2010; 17, 6: 628-631

Institutional Ownership and Firms’ Thrust to Compete

This article provides evidence on the impact of transient (short-term) institutional investors on a firm’s thrust to compete. A firm’s thrust to compete, as an attribute of corporate culture, captures the relative importance of corporate values that push a firm to achieve shareholder value in the short-term by emphasizing goal achievement, fast response to external information, and enhanced competitiveness. We find that greater ownership by transient investors results in firms intensifying their future thrust to compete, suggesting that firms respond to these investors’ preferences and competitive pressures for achieving short-term value creation. In line with our expectations, this effect is not observed for firms with greater ownership by long-horizon institutional investors, who are incentivized to place their emphasis on long-term firm value, over short-term gains. Our findings reveal that the composition of institutional ownership influences the organizational culture of firms in a non-homogeneous way. As such, we provide significant empirical insights for the ongoing debate on the implications arising from the behind‐the‐scenes engagement of institutional investors with management

Financial Distress Risk and Stock Price Crashes

This study uses 462,678 monthly observations of US-listed firms for the period 1990–2018 to document a strong positive relationship between short-term changes in financial distress risk and future stock price crashes. This result is economically significant as a one interquartile increase of the main explanatory variable in any month increases the probability of a stock price crash by 8.33% relative to its mean value. The findings withstand controls for a large array of variables, firm-fixed effect estimations, and alternative definitions of distress and crash risk measures; they are also robust to a range of tests conducted to buttress against endogeneity concerns. The study conducts analyses demonstrating that the positive distress-crash risk relationship is driven by managerial opportunism that seeks to camouflage bad news that has an adverse effect on firms' economic fundamentals. Accordingly, the findings corroborate an agency theory explanation for the impact of distress risk on stock price crashes. This study offers practical insights to investors, who should be vigilant of a firm's distress risk, as sudden short-term increases underscore withheld negative information pertinent to crash risk problems

Financial literacy and its influence on consumers’ internet banking behaviour

This study examines the level and antecedents of financial literacy and investigates its influence on consumers’ internet banking behaviour. The focus is on Cyprus, a country that experienced an unprecedented financial crisis in 2013 that caused an enormous shrinkage of the banking sector. Ever since then, banks have been investing in financial innovations, such as internet banking (i-banking), aiming to enhance customer service and efficiency in the age of financial digitalization. Notwithstanding, the results show that financial literacy is yet too low in Cyprus, whereby only 37.33% of the study’s survey adults have a good financial knowledge proficiency level. The results indicate that financially literate consumers show a strong preference for frequent use of i-banking, whereby the odds of using i-banking frequently are increased by more than 64% for one standard deviation increase in the respondents’ financial knowledge score. The findings highlight the crucial interplay of digital and financial sophistication, and their positive influence on consumers’ usage of digital financial services. The evidence from Cyprus also points to policy directions according to which digital financial education programs should be a central element in national financial literacy strategies