As one of the oldest and most innovative financial institutions, a clearinghouse efficiently clears and settles payments for equity transactions as well as other securities. However, this paper will only be concerned with common and preferred equity securities. The purpose of a clearinghouse is to reduce counterparty risk. It acts as an intermediary between two parties, so that the risk of one party failing to honor its contractual obligation is diminished. It reduces settlement risk through netting, the process of eliminating offsetting transactions, thus decreasing the amount of cash flow. I examine the impact of the New York Stock Exchange Clearinghouse upon its establishment in May 1892. Specifically, I analyze the clearinghouse’s effect on trading costs for different equity securities, scrutinizing the effects on bid-ask spreads. I find that once a firm joined the NYSE clearinghouse, both its relative and absolute bid-ask spreads are narrowed, representing an overall reduction in spreads of 5.28 percent.

This study examines the performance of long-short equity trading strategies from January 1990 to December 2010. This study combines two financial screens that will yield candidates for both long and short positions for each month during the aforementioned time period. Two long-short strategies are tested: (1) perfectly-hedged, or equal allocation to long and short positions, and (2) net-long. The results of this thesis reveal that if a long-short equity manager is able to successfully determine what companies are overvalued and undervalued and actively rebalance their portfolio, perfectly-hedged and net-long strategies can generate superior risk-adjusted alpha.

Over the past two decades a number of Chinese companies have issued shares on both the Hong Kong Stock Exchange and on one of the Chinese stock exchanges. The Hong Kong-listed H-shares of Chinese dual-listed companies have traded at a persistent discount rate relative to the China-listed A-shares. As these shares represent the same ownership rights and cash flows, the shares should theoretically trade at the same price. The price differential between H-shares and A-shares should decrease as international markets continue to converge. The paper analyzes the persistence of the discount rates and the effects of both market and investor sentiment on the price disparity between the two shares. The paper also examines whether certain sectors consistently trade at larger discount rates relative to others.

The intent of this paper is to analyze the structural composition of the European Monetary Union and its implications for the European Financial Crisis, specifically with respect to Greece. This analysis will be driven by a trend analysis of several economic variables from 1999-2010. These variables range from the four requirements set under the Maastricht criteria, competitiveness indicators, and relative European trade balances, to international investment position. A quantitative and empirical analysis of this data finds that the Greek crisis was a result of structural issues with the EMU and the Greek government. The ECB’s inability to enforce the Maastricht Criteria and independent fiscal policy, as well as Greece’s inability to implement efficient fiscal and economic policy, resulted in growing imbalances within the Euro area, as well as a loss of competitiveness and irresponsible rise in sovereign debt for Greece. It is inferred that the EMU was ineffective in achieving its goals of integration; that Greece was not ready to join the EMU when it did; and therefore Greece as a Member State of the EMU was destined to fail.

The objective of this paper is to explain the variation in efficiency of credit unions over the past decade. This study creates an evaluation metric for credit union performance by using a nonparametric technique called data envelopment analysis (DEA). Efficiency is based on the credit unions ability to maximize the members’ benefits by providing adequate loans and savings accounts at low prices while minimizing the resources used. The sample consists of 704 credit unions from 2001 to 2010. Several environmental characteristics were found to influence efficiency. The findings demonstrate evidence for economies of scale as number of members, average savings size, and total assets all positively influence efficiency. The results also indicate that federal charter, number of branches, share of real estate loans, and average loan size negatively correlate with efficiency.

In Champagne, France grape growers and and winemakers work together to make the world's most iconic sparkling wine. Part of what makes Champagne so celebrated is its reputation for constant quality: only the best grapes are used to make wine. In poor vintage years, grape growers sell less grapes to winemakers; poor vintages are the result of bad weather. This presents the opportunity for grape growers to hedge the risk of poor weather and resulting lower harvest values with weather derivatives. This study explores the potential for grape growers to trade them to effectively hedge against low harvest values by hedging against cooler weather in the month of June, when grape vines are flowering and sensitive to cold, through an empirical study of historical grape harvest and temperature data from 1952 through 2011. Weather derivatives would have provided an effective hedge against low harvest values up through 1991. After 1991, harvest sizes and therefore harvest revenues are no longer significantly correlated with weather and weather derivatives no longer provide an effective hedge against low harvest values for grape growers in Champagne.

Through-out the history of the United States, there have been many bank panics starting with the first one in 1819. I use important data from bank panics which happened prior to 1934 to shed light on the most recent Panic of 2007. This data analysis will not only be important to explain the Panic of 2007, but will be essential to help provide insights to what can be done to remedy the situation. Even in 2012, the United States is still feeling the impact of what happened in 2007. Therefore by understanding history and analyzing the past, solutions to prevent future panics can be implemented.

This paper studies a sample of CEOs from companies listed in the Dow Jones Industrial Average from 1992 to 2010, and confirms the theory that board members rely more heavily on firm performance measures for turnover and compensation decisions when less is known about the CEO’s ability. In this paper, I make two contributions to the literature. First, I confirm the empirical findings of literature with a new data set showing that the effect of firm performance on CEO turnover declines over a CEO's tenure. Second, I introduce a new tool, the relationship between CEO compensation and firm performance, for testing the effects of CEO tenure on board member decisions. The evidence indicates that the relationship between firm performance and CEO compensation declines over a CEO's tenure. Collectively, the results of this paper support the theory that board members gradually learn the CEO's ability over his tenure, therefore their decisions for turnover and compensation depend more on firm performance for a new CEO.

This paper will assess the relationship between tenant characteristics and public REIT volatility. Specifically, we focus on the retail REIT subset of the industry. Given that retail REITs are one the most transparent asset classes, they provide an interesting landscape for evaluating the relationship between the firm and the customers, or in this case, the tenants. Specifically, we assess how major tenant ownership, public or private equity owned, impacts the volatility of the REIT’s stock price using 2010 data on 30 retail REITs. Controlling for tenant credit quality, leverage, ROE, book-to-market, size, age, region and property focus, we find that a higher percentage of rental revenue from private equity owned tenants is associated with lower REIT stock volatility, and a higher percentage of rental revenue from publicly owned tenants is associated with higher REIT stock volatility.

This paper examines the relationship between the accounting conservatism construct and the prediction of corporate bankruptcy. Prior research has explored the link between accounting quality and bankruptcy prediction, but it has not examined the relationship between accounting conservatism and bankruptcy prediction. This study hypothesizes that the inclusion of conservatism metrics in the bankruptcy hazard model estimation process should have an incremental effect on the predictive ability of bankruptcy hazard models. This paper finds that the inclusion of conservatism metrics does enhance the predictive power of bankruptcy hazard models for certain subgroups of a population partitioned on the basis of accounting conservatism metrics.