The main objective of this thesis is to implement stochastic correlation into the existing structural credit risk models. There are two stochastic models suggested for the covariance matrix of the assets' prices. In our first model, to induce the stochasticity into the structure of the correlation, we assume that the eigenvectors of the covariance matrix are constant but the eigenvalues are driven by independent Cox-Ingersoll-Ross processes. To price equity options on this framework we first transform the calculations from the pricing domain to the frequency domain. Then we derive a closed formula for the Fourier transform of the Green's function of the pricing PDE. Finally we use the method of images to find the price of the equity options. The same method is used to find closed formulas for marginal probabilities of defaults and CDS prices. In our second model, the covariance of the assets follows a Wishart process, which is an extension of the CIR model to dimensions greater than one. The popularity of the Heston model, which uses the CIR process to model the stochastic volatility, could be a promising point for using Wishart process to model stochastic correlation. We give closed form solutions for equity options, marginal probabilities of defaults, and some other major financial derivatives. For the calculation of our pricing formulas we make a bridge between two recent trends in pricing theory; from one side, pricing of barrier options by Lipton (2001) and Sepp (2006) and from other side the development of Wishart processes by Bru (1991), Gourieroux (2005) and Fonseca et al. (2006, 2007a, 2007b). After obtaining the mathematical results above, we then estimate the parameters of the two models we have developed by an evolutionary algorithm. We prove a theorem which guarantees the convergence of the evolutionary algorithm to the set of optimizing parameters. After estimating the parameters of the two stochastic correlation models, we conduct a comparative analysis of our stochastic correlation models. We give an approximation formula for the joint and marginal probabilities of default for General Motors and Ford. For the marginal probabilities of default, a closed formula is given and for the joint probabilities of default an approximation formula is suggested. To show the convergence properties of this approximation method, we perform the Monte Carlo simulation in two forms: a full and a partial Monte Carlo simulation. At the end, we compare the marginal and joint probabilities with full and partial Monte Carlo simulations.

Using detailed data of individual investors, this dissertation investigates whether and how individuals use financial disclosure and analysts’ signals. Chapter 1 shows that, on average, individuals invest more in firms with readable, concise, and transparent financial disclosures. The results indicate that these relations are less pronounced for overconfident investors, and that individual investors appear to place a greater weighting on such financial disclosure attributes relative to institutional investors. In supplementary analyses, I further examine cross-sectional variations among individuals in their use of disclosure, and find two main subgroups that do not display a preference for accessible and transparent disclosures. The first subgroup is speculative investors, whose investment strategies rely on conjecture rather than knowledge, and the second subgroup is financially literate investors, those with lower information processing costs. These findings support the notion that more accessible and transparent disclosures are used by those individuals who need them the most: i.e., the average American. Lastly, I examine whether individuals’ investment performance varies with financial disclosure attributes and show that individuals’ returns are, on average, increasing in firms with more accessible and transparent disclosures. Chapter 2 examines how individuals react to revisions in analysts’ recommendations and earnings forecasts. First, the analyses show that individuals’ abnormal trading activity increases by 30 percent in response to analysts’ recommendation revisions and by 15 percent in response to analysts’ earnings forecast revisions. Second, the analyses indicate that 47 percent of individuals trade consistently with analyst guidance and 53 percent trade contrarian to analysts’ guidance, which opposes the belief that individuals are a homogenous group of investors. The contrarian behavior is most common in response to analyst downgrades (i.e., purchasing after downgrades) and is most evident among individuals with better prior performance, individuals who trade infrequently, men, and older individuals. Lastly, the study provides evidence suggesting that trading contrarian to analysts is in general hazardous to individuals’ financial health. Taken together, the results indicate that individuals respond to analyst guidance and that individuals’ use of analyst guidance varies significantly with respect to their personal attributes.

A locational comparison

2008, the subprime mortgage of America caused the global financial crisis since 1930. The semiconductor company, Qimonda claimed bankrupt protection due to final issue. Most semiconductor companies including DRAM, IDM were hurt deeply by the financial crisis. This study researches by interviewing and referring the related documentation to understand the semiconductor industry¡¦s history and current situation. And provide the possible management strategies while the financial crisis occurring.

Facing this finance tsunami, the small and medium-sized enterprise own should have the correct management idea, understand positively the government provides each assistance, simultaneously the government directs the bank also to have necessity of the adjustment to financing of strategy the small and medium-sized enterprise, this is this article the main purpose. The short-term says, will face the relatively fierce market decline impact inevitably by the foreign trade small and medium-sized enterprise primarily. Even though after the financial tsunami subsides, within from 3 to 5 years, before the global trade demand extremely will be in the future possible the deflation which, because the US will expend, but greatly is inferior, on the other hand, because the enterprise operational risk will elevate relatively, the bank system will give the letter standard also possibly tends to be strict. Origin and influence after this research main discussion finance tsunami, the government loans the strategy small and medium-sized enterprise of by the bank system execution, to relaxes research of our country Small and medium-sized enterprise impact. This research by way of is related Wen Xianzheng , as well as the article offers the methodology and the historical review law studies under the globalization the financial crisis, the small and medium-sized enterprise and the government, in assists the small and medium-sized enterprise to loan in the strategy the result. This research discovered: The latter financial tsunami time, Our country Government is right 'the small and medium-sized enterprise to loan each condition to have the improvement. The research conclusion thought: The government should revise the credit support mechanism, and using the administrative method, enhances the bank to handle time this lending operation the elasticity and the wish, causes the small and medium-sized enterprise to obtain the fund affable synthesis effect, achieves the government to continue to support the industry and the stable economy policy.

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Recent trend of globalization has lead financial industry to an increasingly competitive environment. In respond to intensify market competition, mergers and acquisition (M&A) amounts financial institutions to become the strategic choice for firms to increase their market power. The trend also adds pressure on local financial institutions of Taiwan to improve their competitiveness for their global position. The result of it was the establishment of financial holding companies (FHC) to utilizes the use of resources and to achieve the economic of scale through M&A between companies. Therefore the market will weight more heavily on FHC and a tendency of continues M&A is expected for the next several years. The purpose of this paper is to analyze the performance of fourteen FCFs of Taiwan by looking their financial profitability, operating efficiency and asset quality and strategic resource allocation performance; the results are summarized as followed: 1.When look at the financial profit performance, Cathay FHC has the best performance therefore it ranks top of the list, and Chine Development FHC has the worse result and ranked at bottom of the list. 2.If look at from operating efficiency and asset quality¡¦s prospective, Chine development FHC, Taishin FHC and Shin Kong FHC are the top three amounts fourteen FHC of Taiwan. 3.To performance better in strategic performance ranking were associated with more diversified in subsidiaries of FCFs or FCFs which has less market shares. 4.In combine of the three performance measurements, Cathay FCF, Chinatrust FCF and Taishin FCF are the top three FCFs amount the fourteen and Chine Development FCF, Jin Sun FCF and Waterland FCF are rank as bottom three for their poor performance.

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Since the dot-com bubble, the concept of Web2.0 infuses new strength and ideas to the industry of internet service. Many successful business models with the qualities of Web2.0 arises the attention all over the world. Web2.0 also announces the traditional internet business model will change dramatically. In addition to that, many Web2.0 acquisitions, such as Google-Youtube or Yahoo-Wretch, enhanced the E-business industry and focused by the world-wild investors. This research, A Project of applying the concepts of Web2.0 to Innovate Business Models, is based on an affiliated project (called I-Design.) sponsored by Triple-I. The research will establish financial evaluations to analysis the possibility of profitability of the project. After that, treating those individual factors with the sensitive analysis. According to the assessment of business modeling when the discount rate is 12%, the result reveals, the project NPV equals to 7,625,979NTD, and IRR is 19%, higher than the general required return 18%.Besides, PI is 2.24 and DPB is 4.01 years, tells that the project is highly profitable. Moreover, with sensitive analysis it concludes that the revenue inflows and the capital outflows are the two factors to the evaluation to the project. However, the revenue inflows is the main significant factor. Hence, the company should, before the price in the market fluctuate, actively develop nich services to increase the sales revenue, in support of the financial feasibility of the entire operation.

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