Traditional finance teaching on derivatives suggests that they can be utilized to reduce portfolio and market risk. Such outcome hinges on the assumption that derivatives are used as risk management tools and there is at least one true hedger in the transaction. In the absence of hedgers,...

In this teaching note, I demonstrate how literal application of the Modern Portfolio Theory (MPT) could lead to inconsistent performance by using data from the U.S. stock markets. The demonstration shows that it is impossible to construct a forecast of an efficient frontier by static analysis of...

This pedagogical note introduces The Essays of Warren Buffett: Lessons for Corporate America. We find the Essays are insightful and useful in the classroom. We also share our lesson plan in using the material for discussion on corporate governance and other issues. A survey result also reveals...

This pedagogical note introduces 'The Essays of Warren Buffett: Lessons for Corporate America'. We find the Essays are insightful and useful in the classroom. We also share our lesson plan in using the material for discussion on corporate governance and other issues. A survey result also reveals...

In this paper we study the development of the most successful futures market in China, the Zhengzhou Commodity Exchange (ZCE). The lack of an active cash market forced ZCE to first establish a cash market prior to the trading of the first successful futures contract; the mungbean futures....

We analyze the relation between volatility and speculative activities in the crude oil futures market and provide short-term forecasts accordingly. By incorporating trading volume and opening interest (speculative ratio) into the volatility dynamics, we document the subtle interaction between...

On November 20, 1998, the Hong Kong Futures Exchange started opening its markets fifteen minutes earlier than the opening time and closes its markets fifteen minutes later than the closing time of the Hong Kong Stock Exchange. In this paper we utilize the Geweke feedback measures to examine the...