• The Journal of Fisheries Business Administration
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• v.44 no.2
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• pp.1-17
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• 2013

We investigate the appropriateness of the fixed 12% discount rate to be used in estimating the amount of compensation for revoking a license for fishery business by the Enforcement Decree of Fisheries Act in Korea. We also suggest the appropriate discount rate fully reflecting the change of market interest rate in the Korean financial market. The capital asset pricing model, or, CAPM is the best known model of risk and return, and is widely used to estimate the expected rate of return for the risky projects. Even though the CAPM implies that the discount rate or the expected rate of return should change as the related market factors do, the discount rate used to estimate compensation for revoking a license for fishery business remains to be the same 12% rate for the last 15 years by law. During this period, however, the yield to maturity for the 5-year government bonds in Korea has dramatically changed from about 12% to less than 3%. In order to provide the fair compensation for the damages against the coastal fisheries and evaluate the intrinsic value of fishery resources in the coastal areas, we suggest that the appropriate discount rate should be determined by the yield to maturity of the government bonds with 5-year maturity, instead of the current fixed 12% interest rate.

• Asia Pacific Journal of Business Review
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• v.1 no.1
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• pp.56-66
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• 2016

This paper analyzes the impact of CSR on the capital market in Korea. Using listed firm data, we found that the creation of a sustainability report that indirectly measures the level of CSR can bring the stock rate of return difference of the capital markets representative market index. First, when a firm that publishes a sustainability report was compared in terms of its market rate of return, it showed a return increase of about 2%. We found that higher returns were gained through the competitive advantage of related business when the firm was actively involved in social responsibility. Second, subdivided by industry, firms belonging to the capital goods industry were found to reach a rate of return higher than that of industry. These firms were noticeable in that they were mainly industries that caused environmental pollution. Third, in an additional analysis, foreign investors were given the sustainability report of financial businesses, which was interpreted as a result of industrial properties. A sustainability report is a comprehensive report on the economic, environmental, and social activities of a firm. Firms must learn that they can gain trust through publishing trustworthy reports while achieving the lasting power of growth from the stakeholders.

• East Asian Journal of Business Economics (EAJBE)
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• v.2 no.4
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• pp.26-47
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• 2014

The paper examined effect of age cohort on life cycle financial planning. A total of 990 questionnaires were distributed with a 55.2% return rate. Seven hypotheses were analysed using hierarchical and ordinary regression analysis. The results revealed that age cohort variables made significant contribution to life cycle financial planning as well as personal orientation towards retirement planning, particularly the younger age cohort. Age cohorts do affect personal orientation towards retirement planning with the confidence level making a significant impact. Current financial resources do have a strong positive impact on consumption for all age cohorts. On the other hand, no significant effect was found between age cohorts and current financial resources but older age cohorts were relatively more significant predictors. The implication was that not only should their individual perceptions of financial planning become an increasingly important part of people's long-term commitment throughout their life-cycle, it must also assume the role as a self-directed life-long learning process, in view of the ever-changing and complicated financial environment.

• Journal of applied mathematics & informatics
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• v.34 no.1_2
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• pp.75-84
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• 2016

The objective of this work is to perform a geometric analysis of the net present value (NPV) and Internal Rate of Return (IRR), defining analytics and in verifying the relationship between geometric properties of such functions. For this simulation, was used the values of the cash flows for each period identical and equal to US$ 200.00 cash, the initial investment US$ 1,000.00 and investments of each identical and equal to US$ 50.00 period. In addition, the discount rate and time were considered a maximum of 2 years (24 months) at a rate between 0 and 100%. The geometric analysis of the characteristics obtained from the expressions of the Net Present Value and Internal Rate of Return possible to observe that besides the analytical dependence between these quantities , the geometric relationships are relevant when studied in relation to the zero NPV and expressed a great contribution the sense of a broad vision for the administrator in the analysis of analytical variables that in uences the balance sheet of the company.

• The Journal of Information Systems
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• v.28 no.4
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• pp.333-358
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• 2019

Purpose The study aims to develop a data-based decision model for private bankers when recommending hedge funds to their customers in financial institutions. Design/methodology/approach The independent variables are set in two groups. The independent variables of the first group are aggressive investors, active investors, and risk-neutral type investors. In the second group, variables considered by private bankers include customer propensity to invest, reliability, product subscription experience, professionalism, intimacy, and product understanding. A decision-making variable for a private banker is in recommending a first-rate general private fund composed of foreign and domestic FinTech products. These contain dependent variables that include target return rate(%), fund period (months), safeguard existence, underlying asset, and hedge fund name. Findings Based on the research results, there is a 94.4% accuracy in decision-making when the independent variables (customer rating, reliability, intimacy, product subscription experience, professionalism and product understanding) are used according to the following order of relevant dependent variables: step 1 on safeguard existence, step 2 on target return rate, step 3 on fund period, and step 4 on hedge fund name. Next, a 93.7% accuracy is expected when decision-making uses the following order of dependent variables: step 1 on safeguard existence, step 2 on target return rate, step 3 on underlying asset, and step 4 on fund period. In conclusion, a private banker conducts a decision making stage when recommending hedge funds to their customers. When examining a private banker's recommendations of hedge funds to a customer, independent variables influencing dependent variables are intimacy, product comprehension, and product subscription experience according to a categorical regression model and artificial neural network analysis model.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.42 no.1
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• pp.137-142
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• 2019

There are two methods for evaluating two or more mutually exclusive projects. One is a total investment approach and the other is an incremental investment approach. The former can rank projects by the criterion of the net present value, but the latter can't do it. An incremental investment approach is only possible when all pairwise alternatives are compared. Thus an incremental investment approach is superior in ranking them over an incremental investment approach. To do so, a principle of comparison must be established. Comparisons of profitability are reasonable when operating the same amount of investment over the same period of time. One principle is that all projects are invested in the largest of the projects. Another principle is that all projects are invested during the longest project life of the projects. In this paper, even if the principle is followed, it will be shown that the external rate of return fails to rank them. However, the productive rate of return criterion would prove to be able to rank them like the net present value standard, provided that the principle of comparison is kept. In addition, rate of returns can be assessed so that all mutually exclusive projects can be compared at once, such as on the criterion of the net present value. That is, it can be also compared with many other returns, such as the profit rates on financial investments or real investments.

• The Korean Journal of Financial Management
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• v.21 no.2
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• pp.65-98
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• 2004

This paper analyzes the foreign exchange exposure and the influence of determinants on the significant exposure under various return horizons of US dollar and the Japanese yen. Also this research is extended to the existence of asymmetric exposures to foreign exchange risk. The exchange rate exposures exhibit significant time variations that are very large to represent changes in cash flow sensitivities, but the relation of the significant exposures and time variations is not monotonically increasing. The extent to which a firm is exposed to exchange rate fluctuations can be explained by the level of the growth potential, nm size and leverage. For the various return horizons, firms with a higher growth potential tend to have higher exposures. And the larger firms' exposures tend to be smaller. The influences of the level of export ratio and leverage vary with return horizons and each periods. It is found that the exposures of fins are asymmetric. The asymmetry is mainly explained by the market share hypothesis. The level of export ratio commonly influences the asymmetric exposures to the US dollar and the Japanese yen.

• Journal of the Korean Operations Research and Management Science Society
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• v.38 no.2
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• pp.75-93
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• 2013

In applying Markowitz's portfolio selection model to the stock market, we developed a comprehensive investment decision-making framework including key inputs for portfolio theory (i.e., individual stocks' expected rate of return and covariance) and minimum required expected return. For estimating the key inputs of our decision-making framework, we utilized an exponentially weighted moving average (EWMA) which places more emphasis on recent data than the conventional simple moving average (SMA). We empirically analyzed the investment results of the decision-making framework with the same 15 stocks in Samsung Group Funds found in the Korean stock market between 2007 and 2011. This five-year investment horizon is marked by global financial crises including the U.S. subprime mortgage crisis, the collapse of Lehman Brothers, and the European sovereign-debt crisis. We measure portfolio performance in terms of rate of return, standard deviation of returns, and Sharpe ratio. Results are compared with the following benchmarks : 1) KOSPI, 2) Samsung Group Funds, 3) Talmudic portfolio based on the na$\ddot{i}$ve 1/N rule, and 4) Markowitz's model with SMA. We performed sensitivity analyses on all the input parameters that are necessary for designing an investment decision-making framework : smoothing constant for EWMA, minimum required expected return for the portfolio, and portfolio rebalancing period. In conclusion, appropriate use of the comprehensive investment decision-making framework based on the Markowitz's model integrated with EWMA proves to achieve outstanding performance compared to the benchmarks.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.12
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• pp.909-917
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• 2020

The research aims to analyze the firm-specific and macroeconomic factors that affect insurance company's financial performance. The research explores the variables that influence the financial performance of the United Arab Emirates (UAE)' insurance companies. The analysis for determining financial performance considers the following variables: the firm's age, retention ratio, capital adequacy, underwriting risk/loss ratio, financial-leverage, reinsurance dependency, and macro-economic factors such as GDP per capita, inflation rate considered as independent factors. The return-on-asset (ROA) is the key measuring indicator; it is regarded as the dependent variable for financial performance measures. The research focuses on secondary information obtained from insurance companies' financial statements. The researcher targeted 18 insurance companies listed on the UAE stock exchanges for study purposes. The research examines the overall factors that influence the financial performance of an insurance company. For analysis of data, software package of social sciences (SPSS version 20) is used. The studies used correlation and multiple linear regression analysis to determine financial performance and their effects. The analysis suggests that there are important and constructive relationships between the size, capital adequacy, and reinsurance dependency, while loss ratio, retention ratio, and financial leverage indicate a major negative relationship. And there's no link between GDP per capita and inflation.

• International conference on construction engineering and project management
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• 2013.01a
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• pp.602-607
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• 2013

Financial risks associated with capital investments are often measured with different feasibility indicators such as the net present value (NPV), the internal rate of return (IRR), the payback period (PBP), and the benefit-cost ratio (BCR). This paper aims at demonstrating practical applications of probabilistic feasibility analysis techniques for an integrated feasibility evaluation of the IRR and PBP. The IRR and PBP are concurrently analyzed in order to measure the profitability and liquidity, respectively, of a cash flow. The cash flow data of a real wind turbine project is used in the study. The presented approach consists of two phases. First, two newly reported analysis techniques are used to carry out a series of what-if analyses for the IRR and PBP. Second, the relationship between the IRR and PBP is identified using Monte Carlo simulation. The results demonstrate that the integrated feasibility evaluation of stochastic cash flows becomes a more viable option with the aide of newly developed probabilistic analysis techniques. It is also shown that the relationship between the IRR and PBP for the wind turbine project can be used as a predictive model for the actual IRR at the end of the service life based on the actual PBP of the project early in the service life.