Hedging Against the Interest-rate Risk by Measuring the Yield-curve Movement

By adopting the polynomial interpolation method, we propose an approach to hedge against the interest-rate risk of the default-free bonds by measuring the nonparallel movement of the yield-curve, such as the translation, the rotation and the twist. The empirical analysis shows that our hedging strategies are comparable to traditional duration-convexity strategy, or even better when we have more suitable hedging instruments on hand. The article shows that this strategy is flexible and robust to cope with the interest-rate risk and can help fine-tune a position as time changes.Comment: 12 pages, 2 tables, 5 figure

The Impact of Capital Structure and Financial Media on Mergers & Acquisitions

This thesis explores the impact of capital structure and financial media on Mergers and Acquisitions. The empirical evidence on this thesis demonstrates that firm’s capital structure and financial media are both significantly related to the M&A success and M&A performances. Chapter 3 empirically investigates the interaction between a bidder’s capital structure and the probability of M&A success. It suggests that bidders with great leverage deficit are less likely to be successful in M&A. The potential explanation is that overleveraged bidders are unable to provide attractive takeover offers with high premiums and thus reducing the probability of success. Chapter 4 further studies the implications of capital structure theory for M&A. The empirical evidence shows that bidder’s leverage deficit is negatively related to the probability of using pure cash payment. This implies that firms may actively rebalance their financial leverage to optimal level through M&A. Overleveraged bidders are less likely to use cash payment since they are willing to reduce their deficit level by acquiring targets with equity. By contrast, underleveraged bidders have more incentive to use cash payment because they tend to increase their debt level. Chapter 4 also shows that bidder’s capital structure has large impact on the merging firms’ stock performances in both short term and long term. Therefore bidder’s capital structure is considered as an important determinant for M&A performance. In addition, Chapter 5 further examines the relation between M&A performance and financial media. It reports that bidders with positive media attitude in pre-merger period are significantly outperformance than those with negative media attitude. It concludes that the pre-merger news released by influential financial media has large impact on market reactions to M&A announcements. Furthermore, the empirical evidence suggests that financial media is able to partially predict merging firm’s long term stock performance. Overall, our research in this thesis contributes to the literature with conclusive evidence that the considerations of capital structure and financial media provide further understandings with M&A performances

Color variation of the gray balance target as related to color misregistration in multi-angle halftone color printing

This study was to investigate how color variation of a gray balance target was related to color misregistration in the multi-angle halftone color printing process. The dot overlap ping patterns of a gray balance target with 25%, 50% and 75% screen period off-register conditions were simulated on computer; the Neugebauer fractional areas from the ran domly selected thirty-one unit areas were calculated through the application of CAD pro grams and programing. The n-modified Neugebauer equations were then used to predict the colors of the targets and color differences between them. In order to verify the theo retical findings, an experimental study was also conducted. There is no significant color difference between the gray balance targets due to color mis registration. The color differences between the targets due to different dot configurations, both from the mathematical analysis study and the experimental study, are all smaller than one AE value although the color difference within a rosette pattern for an individual unit area can vary as much as 16 AE values. Conclusions: (1) One can not reject the null hypothesis of this study which states that color misregistration will not cause significant color variation in gray balance target in multi-angle color printing; (2) the color variation due to color misregistration on a gray balance target will be so small that it can be negligible for the purpose of being a control target for the multi-angle halftone color printing process