fin645 all module discussions latest 2017

Week 1 discussion

DQ1 Momentum is an anomaly that gives those subscribing in efficient markets the most trouble. What is Momentum in stock prices? Why is this a problem for the efficient market hypothesis?

DQ2 Please watch the following video and discuss.

Link:https://www.ted.com/talks/barry_schwartz_on_the_paradox_of_choice

Week 2 discussion

DQ1 Step 1: Open the attached document: Confidence intervals quiz. Follow the instructions in estimating your 90% confidence intervals for each item.

Step 2: Open the attached document: Confidence Interval Quiz - answers. Score your quiz...how many true values fall within you 90% confidence interval.

LINK FOR-Quiz

LINK FOR-Answers

Post your score...what do think this implies about our ability to estimate variability with a 90% confidence level?

DQ2 Please watch the following video and discuss.

Link:https://www.ted.com/talks/tali_sharot_the_optimism_bias

DQ3 Anchors are ubiquitous in financial markets. Give some examples.

Week 3 discussion

DQ1 If employee-investors are unsophisticated and unlikely to be materially influenced by educational efforts, the best way to improve the welfare of employee-investors is pension design. Discuss.

DQ2 Please watch the following video and discuss.

Link:http://www.ted.com/talks/shlomo_benartzi_saving_more_tomorrow

DQ3 In housing markets, there is a positive correlation between prices and trading volume. When there is a housing boom, many houses sell at, or even above, the prices asked by sellers. In times of bust, homes sit on the market for a long time with asking prices that exceed the prices that can reasonably be expected. How can this be explained?

Week 4 discussion

DQ1 19 December 2000 an article appeared in The Wall Street Journal discussing stock price declines that followed share repurchases made by AT&T, Intel, Microsoft, and Hewlett-Packard. The article mentions that Warren Buffett, chairman of Berkshire Hathaway, criticized firms that engaged in share repurchases. In a letter to shareholders, Buffett noted that share repurchases made sense during the mid-1970s, when many stocks traded below their intrinsic value. However, he argued that conditions changed during the bull market of the 1990s, even though share repurchases had become much more frequent. He also suggested that the motivation for share repurchases had also changed, and that during the 1990s firms bought back their shares in order to pump up their stock prices. Discuss Warren Buffett’s views.

DQ2 Please watch the following video and discuss.

Link:https://www.ted.com/talks/dan_ariely_on_our_buggy_moral_code

DQ3 Imagine that you are a divisional manager. Currently you are a member of a committee which is considering two product investments proposed by two other divisional managers: Joe and John. While walking over to the presentations, Joe seems rather arrogant. He mentions that he golfs with the CEO, is a key player in the firm, and that you could really learn a lot from him. In thinking over the projects after the presentations, you find you are really leaning toward John’s proposal even though the projects are quite similar in terms of estimated cash lows and risks. How can you explain this?

Week 5 discussion

DQ1 Emotional balance is desirable for financial traders. Discuss.

DQ2 Please watch the following video and discuss.

Link:https://www.ted.com/talks/colin_camerer_neuroscience_game_theory_monkeys

DQ3 Please watch the following video and discuss.

Link:https://www.ted.com/talks/dan_ariely_asks_are_we_in_control_of_our_own_decisions