Does the way people earn money affect their economic decisions? The main contribution of this thesis is to provide new evidence that the way people earn money affects their decision-making. Standard economic theory generally assumes that money is fungible – that is, each unit of money is a perfect substitute for another. Fungibility thus predicts that source of income should have no influence on individual decision-making. On the other hand, Prospect theory determines the value of same prospect as gain or loss relative to the reference point. Prospect theory predicts a significant source of income on individual decision-making if source of income shifts the reference point. This thesis has focused on investigating whether source of income affects (a) individual risk-preference, which governs individual decision-making under risk; and (b) individual time-preference, which governs individual intertemporal decision-making. From a series of real-effort laboratory experiments, I find that subjects are more risk-averse and more patient concerning hard-earned money than with easily earned money consistent with Prospect theory and loss aversion.

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Energy consumption in the transport sector is expected to increase substantially over the coming decades. The uncertainty in the forecasts are relatively high regarding the size of the increase but reports from the US Energy Information Administration (EIA) points to an increase of 56 percent between 2010 and 2040 (IEO2013, 2013, p. 9). World Energy Council forecasts an increase between 30 and 85 percent, depending on the impact of various factors such as market regulation, population growth, urbanization, and the availability of fossil energy (Global Transportation Scenarios 2050 (TSG 2050), 2011, p. 4-5). Some of this energy could come from advanced renewable fuels such as advanced renewable biodiesel. The commercialization of advanced renewable biofuels has however been slow even though the technology has long been considered mature for large scale production. External market factors that are frequently blamed for the lack of commercialization are lack of political support, low crude oil prices, high raw material prices, and notable profitability for producers of first generation biofuels. Previous studies further suggest that advanced biofuels are expensive to produce (Demirbas, 2010; Milbrandt et al., 2013) and that the companies operating in the industry hold high financial risks (Miller et al., 2013). This study examines the systemic financial risks as well as the estimated returns that the market places on companies active in the emerging advanced biodiesel industry. The results from the study indicate, contrary to previous studies and current external market factors that the systematic risks are not considerable higher for the advanced biodiesel industry than the market average or the established biofuel industry. This is despite the fact that oil prices have been low, raw materials prices high and that the uncertainty surrounding the political forms of support for the industry during the studied period have increased. This should have resulted in increasing rather than decreasing financial risk in relation to the previous studies of the advanced biofuel sector. Important factors that contribute to the results obtained in this study are circumstances that previous studies have completely disregarded, factors that may be beneficial for the studied companies. The studied firms are showing noteworthy profitability, access to substantial working capital, relatively low ratios between stock prices and cash flows. Furthermore, the analyzed companies have a business structure that other studies so far have completely ignored, e.g. they are structured as "biorefineries". This means the studied firms, similarly to conventional petroleum refineries, are producing and trading various products produced from the same raw material. The difference being that the analyzed firms use renewable raw materials rather than crude oil to produce the commodities. The firms thus possess an "option-based" diversification strategy which may be perceived by the market as a future real option. In contrast to focused firms these firms may simply change their business focus based on changes in prevailing external market factors or decreasing profitability in any part of the company. In accordance with the theories of the effective market hypothesis theory and random walk the market has access to all this available knowledge regarding these firms’ specific factors, pricing the risks on this knowledge these as well as prevailing external market factors. The results of the study suggest that the firm-specific factors in the studied companies may be more important than some of the considered external market factors in the pricing of financial systemic risks.

"Submitted in partial fulfillment of the requirements for the degree of Master of Business Administration from the Naval Postgraduate School, June 2008." / Advisor(s): San Miguel, Joseph ; Summers, Don. "June 2008." "MBA professional report"--Cover. Description based on title screen as viewed on August 8, 2008. Includes bibliographical references (p. 41). Also available in print.

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In a 2016 comment letter, the SEC summarizes the ongoing debate regarding the usefulness of market risk disclosures and calls for additional discussion (SEC Concept Release 2016). In response to the SEC’s call, I investigate whether investors and firms benefit from market risk disclosures. Prior literature suggests that informative corporate disclosure is associated with improved liquidity and investment efficiency. I find that informative textual contents of market risk disclosures improve investors’ information environment, and as a result, are associated with higher liquidity level, lower liquidity uncertainty, and improved investment efficiency. My study is relevant to the ongoing debate regarding the usefulness of market risk disclosures, calls for more detailed regulatory guidance for market risk disclosures, and contributes to the literature on liquidity, investment efficiency, and risk factor disclosures. / Includes bibliography. / Dissertation (Ph.D.)--Florida Atlantic University, 2018. / FAU Electronic Theses and Dissertations Collection

Thesis (Ph.D.)--Kent State University, 2006. / Title from PDF t.p. (viewed June 11, 2009). Advisor: Mark E. Holder. Keywords: corporate governance, executive compensation, employee stock options. Includes bibliographical references (p. 80-84).

Research indicates that the dynamics and complexities driving and challenging business organisations in the current era have increased exponentially in the recent past. As a result more complex demands are being placed on organisations to adapt to an ever-changing environment. This adaptation to change is demanding more flexible structures capable of enduring the dynamics of current market risks. This research proposed that such endurance is possible by reconsidering the current paradigm that governs an understanding of risk. It is proposed that risk to date has been focused on a quantitative perception. In the light of this a comprehension from a qualitative perspective is proposed. This comprehension will then permit concepts from a number of diverse disciplines to be incorporated into an alternative paradigm on risk. As such a more creative approach to understanding risk can be presented. This dissertation will focus on introducing creativity into the current understanding of risk in a bid to produce a qualitative risk model capable of not only defining an alternative definition of risk but also providing solutions to managing risk. In this manner, it is proposed that a trend toward a more flexible organisational structure will arise and a comprehension of risk that is more in keeping with current economic trends will result. / Dissertation (Magister Commercii (Financial Management Sciences))--University of Pretoria, 2007. / Accounting / unrestricted

This thesis studies two subareas within the forecasting literature: volatility forecasting and risk-neutral density estimation and asks the question of how accurate volatility forecasts and risk-neutral density estimates can be made based on the given information. Two sources of information are employed to make those forecasts: historical information contained in time series of asset prices, and forward-looking information embedded in prices of traded options. Chapter 2 tests the comparative performance of two volatility scaling laws - the square-root-of-time (√T) and an empirical law, TH, characterized by the Hurst exponent (H) - where volatility is measured by sample standard deviation of returns, for forecasting the volatility term structure of crude oil price changes and ten foreign currency changes. We find that the empirical law is overall superior for crude oil, whereas the selection of a superior model is currency-specific and relative performance substantially differs across currencies. Our results are particularly important for regulatory risk management using Value-at-Risk and suggest the use of empirical law for volatility and quantile scaling. Chapter 3 studies the predictive ability of corridor implied volatility (CIV) measure. By adding CIV measures to the modified GARCH specifications, we show that narrow and mid-range CIVs outperform the wide CIVs, market volatility index and the BlackScholes implied volatility for horizons up to 21 days under various market conditions. Results of simulated trading reinforce our statistical findings. Chapter 4 compares six estimation methods for extracting risk-neutral densities (RND) from option prices. By using a pseudo-price based simulation, we find that the positive convolution approximation method provides the best performance, while mixture of two lognormals is the worst; In addition, we show that both price and volatility jumps are important components for option pricing. Our results have practical applications for policymakers as RNDs are important indicators to gauge market sentiment and expectations.