Journal of Financial Education

Articles

Vol. 41, No. 3, 2015

From Psychology, Law, Accounting and Economics: Measuring the Influence of Finance Journals in the Social Sciences
INTRODUCTIONMeasuring the influence of articles published in ajournai based on the number of times the articles are cited seems fairly straightforward. It simply requires that a time period be designated, a set of citing journals be identified and the...
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Have Leading Finance Textbooks Incorporated Recent Events?
INTRODUCTIONThere is considerable evidence over the past 20 years that many of the key concepts in modern finance-efficient markets, rational investors, and corporations regularly doing the right thing for their shareholders-have not been borne out empirically....
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The Effect of Insurance Education on Consumer Attitudes: A Study of the Property and Casualty Industry
INTRODUCTIONWe surveyed undergraduate students at six universities to determine if taking a Principles of Insurance class fundamentally changes their attitudes about and opinions of the property and casualty (P&C) insurance industry. As the P&C...
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Prioritizing Time for Finance Undergraduates
(ProQuest: ... denotes formulae omitted.)INTRODUCTIONFor many undergraduate finance students finding a job in the financial industry upon graduation is not an easy task. The recent financial crisis and slow economic recovery have undoubtedly required...
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Excel Modeling Assignments and Automatic Grading
INTRODUCTIONThe purpose of this paper is to present an automated grading system for Excel based modeling assignments. It is important for students majoring in finance and other business disciplines to develop their knowledge of Excel. Holden and Womack...
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Illustrating Non-Constant Marginal Cost of Capital and the Interdependence of Independent Projects
(ProQuest: ... denotes formulae omitted.)INTRODUCTIONMutual exclusion, capital rationing, multiple divisions, different lives (durations) of projects, scale differences, and mathematical implications such as multiple internal rates of return (IRRs) all...
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Am I Diversified? an Exercise for Finance Students
INTRODUCTIONJim Cramer, the host of CNBC's Mad Money, often includes a segment on his show where he asks viewers to call-in with the names of five stocks that they own. Cramer will then give his opinion as to whether or not the viewer is sufficiently...
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Animating Finance Students through the Use of Animation
INTRODUCTIONUndergraduate finance classes frequently include a semester project along with the requisite exams. Traditionally, the project is a term paper, an Excel-based analytical report or some type of class presentation. While all are of merit, today's...
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Vol. 41, No. 2, 2015

Expanding Management in Student Managed Investment Funds
INTRODUCTIONThe benefits of experiential education programs as part of a college curriculum are documented by a number of studies (for example, see Houde, 2007; Kolb and Kolb, 2005; Kayes and Kayes, 2003; Gagnon and Witt-Smith, 2001; LaForge and Busing,...
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Thinking Patterns: An Exploratory Investigation of Student Perceptions of Costs and Benefits of College Loan Debt
INTRODUCTIONHigher education still pays even in times of rising tuition and unemployment rates. According to a 2010 College Board study, a typical bachelor's degree recipient can expect to earn 66 percent more over his or her working lifetime than an...
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Experiential Learning in Personal Finance: A Principles and Applications Based Approach
INTRODUCTIONIndividual states have passed 24 bills, proclamations, and resolutions pertaining to increasing financial literacy at the state level. And Congress has established a Financial Literacy and Education Commission at the national level (Anthes,...
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Modeling Dollar Losses for Non-tradable/Illiquid Risks
(ProQuest: ... denotes formulae omitted.)INTRODUCTIONEstimating dollar value losses due to various risks is becoming a common practice, especially with acceptance of measures like Value-at-Risk (VaR) in both academia and practice. The traditional way...
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A Cash Flow Approach to Analyzing Long-Term Liabilities: A Pedagogical Exercise
INTRODUCTIONThe analysis of long-term liabilities is a topic regularly covered in a number of finance and accounting courses. The topic is typically covered in a very cursory manner in the first undergraduate finance course, most often as part of a broader...
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You Decide: The Company You Keep
THE SCENEPolice struggle to keep the crowd under control as hundreds of reporters, television crews, and other onlookers pack the street outside the federal courthouse on the cold winter morning. Eventually, the police clear a path for the car bringing...
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Teaching Comparative Risk of Put Buying vs. Short Selling
INTRODUCTIONIn this paper we compare the risks from two alternative bearish strategies: put buying and short selling. Little research has been conducted on the relative risk of these strategies but a well-established academic position holds that put...
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Vol. 41, No. 1, 2015

An Interdisciplinary Service-Learning Course for Undergraduate Finance and Accounting Students: The VITA Program Expanded
INTRODUCTIONThis paper describes two iterations of an interdisciplinary collaboration between a finance and an accounting professor to develop a service-learning experience in which students engaged in income tax preparation, financial literacy training,...
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Is the Second Time the Charm for Students Repeating Introductory Finance?
INTRODUCTIONSimilar to other required courses in the undergraduate business program, introductory finance courses have large enrollments and students with diverse backgrounds, motivations, and learning styles. Many students begin the course with little...
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MIRR: The Means to an End? Reinforcing Optimal Investment Decisions Using the NPV Rule
(ProQuest: ... denotes formulae omitted.)INTRODUCTIONThe MIRR investment decision criterion yields mixed reviews from academia. Although the MIRR rule dates back to Duvillard in 1787 (Biondi, 2006), MIRR is often ignored in surveys of capital budgeting...
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Enhancing the Learning Experience in Finance Using Online Video Clips
INTRODUCTIONOne of the primary goals of finance instructors is to get students engaged and excited about the subject matter. This may not always be an easy task, as students do not often possess the corporate frame of reference that would enable them...
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Credit Cards, Excess Debt, and the Time Value of Money: The Parable of the Debt Banana
(ProQuest: ... denotes formulae omitted.)INTRODUCTIONThe parable of the debt banana is an analogy between the accumulation of excess personal debt and the accumulation of excess body weight. We created and presented our parable in a compulsory Finance...
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Dancing with Venture Capitalists: Evaluating the Feasibility of an Expansion Project
INTRODUCTIONIt was a windy cold night in Damascus in late December 2006. Mr. Ziad Dukar, the owner and manager of the Zanobia Dance & Theater Inc., was still in his office at the Old Downtown Theater building. A week ago, when Mr. Dukar renewed the...
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An Analysis of Personal Financial Literacy among Educators
INTRODUCTIONThe knowledge based economy and the global age create many challenges for the traditional education system. Specifically, the new era changes the kind of skills and knowledge students will need when they graduate from school and begin participating...
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Vol. 40, No. 3/4, Fall/Winter

A Survey and Discussion of Competing Mean-Variance Statistics in Portfolio Analysis
Portfolio theory proposes various strategies that use available information and forecasting techniques to seek better performance than a portfolio that is simply diversified broadly. Most strategies present a variety of applicable mean-variance statistics,...
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Applying Multi-Factor Models of Stock Returns: Student Exercises and Applications
Multi-factor return models, along with the single-factor market model, occupy a pivotal place in the investments curriculum and are widely implemented in practice, both in stock selection and in portfolio manager evaluation. In this paper we show how...
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Introducing Time-Varying Risk
While the empirical validity of the Capital Asset Pricing Model (CAPM) of Sharpe (1964) is controversial, the conditional version of the CAPM is a simple but powerful tool to examine the time-varying properties of risk and returns. However, even leading...
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Incorporating Powerful Excel Tools into Finance Teaching
Data Table, Charts, Scenario Manager, Goal Seek, and Solver are powerful Excel tools in solving financial problems. Incorporating these tools into finance teaching can help students understand finance concepts intuitively, and bridge the gap between...
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Teaching the Effects of Risky Debt and Financial Distress Costs Using Consistent Examples
Most finance texts that cover the Modigliani-Miller capital structure propositions use numerical examples to show the effects of debt use on a firm's capital costs. Far fewer texts cover the effects of risky debt or financial distress costs explicitly...
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Teaching Financial Literacy with Process-Oriented Guided-Inquiry Learning (POGIL)
This project describes the adaptation of Process-Oriented Guided-Inquiry Learning (POGIL) to an undergraduate financial literacy course and compares the learning gains from this method vs. traditional lecture. Students enrolled in six sections of a financial...
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MBO of Discóbolo
Francisco J. Lopez Lubian and Pablo Garcia EstevezIE Business School and CUNEFIn early February 2013, Discóbolo CFO Eduardo Martín received a call from the venture-capital firm Lewis-Partner (LPCR):LPCR: Mr Martín?M: Yes. Who= calling?LPCR: My name is...
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Addendum - Student Evaluations of Finance Faculty: Perceived Difficulty Means Lower Faculty Evaluations
In the original paper published in the spring/summer 2014 issue of the Journal of Financial Education an important table did not reproduce in the printing process and that table and it's discussion is provided in this addendum. That paper compares student...
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Vol. 40, No. 1/2, Spring/Summer

Online Interactive Homework Help for Introductory Finance
The challenge of developing interactive online learning tools that students find helpful and that enhance student learning is exciting, demanding, and rewarding. This paper documents the development of online Homework Help for introductory finance students...
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An Introductory Application of Monte Carlo Simulatoin in Capital Budgeting Analysis
There is a lack of coverage of an application of Monte Carlo simulation in capital budgeting in introductory level finance textbooks. In more advanced level textbooks, the application is not presented in an easy to understand fashion for students with...
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Understanding Weighted Average Cost of Capital: A Pedagogical Application
We offer a pedagogical application of the capital structure decision-making process. The application consists of a two-stage interactive spreadsheet model by which the student assumes the role of financial manager. The student first performs construction...
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A Simple Structure to Teach How a Board's Risk Management Policy Is Implemented
Using a simple framework, a typical finance student can gain a clear, intuitive understanding of how risk management can be employed to comply with policy set forth by the firm's board. A parsimonious risk setting provides a better comprehension of the...
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Re-Examining an Old Question: Does the IRR Method Implicitly Assume a Reinvestment Rate?
This study reexamines whether the IRR method implicitly assumes a reinvestment rate. Using a numeric example, we show the IRR as a constant rate of return on the declining balance of the investment, with neither an implied disposition of the intermediate...
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Facebooks' Initial Public Offering
In May 2012, as Facebook prepared for its initial public offering (IPO), company executives and investment bankers were trying to determine the initial offer price. Facebook indicated the price would be between $28 and $35 per share in its most recent...
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The Formula That Felled Wall Street? an Instructor's Guide to Default Modeling
Use of a one-factor model for the distribution of loan defaults has been repeatedly implicated in the Financial Crisis of 2007 - 2010, a.k.a. the Subprime Mortgage Crisis. Readers of articles in the business media are left with a host of questions. Just...
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Student Evaluations of Finance Faculty: Perceived Difficulty Means Lower Faculty Evaluations
This study compares student ratings of finance professors to faculty ratings in other academic disciplines and identifies some of the factors responsible for those differences using data from RateMyProfessors.com. Empirical results show that students...
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Student Online Presentations and Peer Evaluations in a Face-to-Face Case Class
The use of online multimedia technology for student presentations can be very effective in an MBA financial case course and offers additional options concerning the pedagogical design of a case class. Online presentations also make easier the collection...
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Vol. 39, No. 1/2, Spring

Are Universities Improving Student Financial Literacy? A Study of General Education Curriculum
This study examines the undergraduate curriculum at 435 universities to determine whether personal financial literacy courses are allowed to fulfill a general education requirement. Only 37 of the schools show the course as an elective. While finance...
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Using the Blackboard Course Management System to Analyze Student Effort and Performance
This paper documents a novel use of the Blackboard course management system to investigate the relationship between student effort and performance. We measure student effort by tracking the number of times students access study resources that have been...
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Mandatory Prerequisite Testing and Performance in Intermediate Corporate Finance
The purpose of this paper is to examine the association between mandatory prerequisite testing and performance in Intermediate Corporate Finance. Scores on prerequisite tests are strongly, positively related to Intermediate Finance course grades even...
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Readability of Introductory Finance Textbooks
Selection of a textbook for an introductory finance course can be challenging. Many criteria may be considered in such decisions, including a textbook's readability level. Using the Flesch-Kincaid readability index, this study analyzes the predicted...
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Incorporating a Real-Time FX Trading Platform in an International Business Finance Class
Recent advances in computer technology and internet speed have opened up new teaching possibilities for the International Business Finance (IBF) course. An entire class of IBF students can now engage in real-time, real- world, round-the-clock leveraged...
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Clarifying the Risk-Return Implications of Operating Leverage as Presented in the Sales-NOI Relationship
A topic that is commonly addressed in both principles of managerial accounting textbooks and fundamentals of business finance texts is operating leverage, which examines the effect of fixed operating costs on the relationship between a firm's sales and...
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Barbarians in the Classroom: The Case of RJR Nabisco
This paper describes how the variety of teaching materials related to the takeover battle for RJR Nabisco, including a Harvard Business School case, a best-selling book, articles in the popular press, and a full length motion picture can be utilized...
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Time Value of Money Made Simple: A Graphic Teaching Method
A presented integrated time value of money graphic method helps students visualize and achieve a clearer understanding of time value of money. This tool helps students determine what type of time value of money problem they are dealing with as well as...
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Hotel Riscal for Wine Aficionados
"We have been producing some of the finest wines from our vineyards and facilitates here for more than a century and now you propose that we construct a hotel? While I know that tourism is an important component of Spain's economy, as well as the Rioja...
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CSX's Proxy Contest: A Battle of Metrics
Two dissident hedge funds jointly launched a proxy campaign against CSX management, proposing a slate of new directors at CSX's 2008 annual meeting. The dissidents said CSX was mis-managed and provided statistics of poor performance and a poor operating...
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