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Economics
Department Honors Students
Class of 2008
Congratulations!
The
economics and accounting faculty are proud to present
the 2008 Economics Department honors students: Sam Hutchings,
Lauren Oplinger, Mariesa Searles and Caitlin Street. Below
are paper abstracts and links to their full thesis papers.
The complete papers can be downloaded in PDF format by
clicking the titles. (A free PDF document reader is available
from Adobe (www.adobe.com).)
The
papers will presented at the Holy Cross Academic Conference
on April 24-25, 2008 from 4-5 pm in Hogan 403. The public
is invited. Congratulations to each of these fine students!
A
list of some past honors theses can be found at the bottom
of this page. A description of the department honors
program is available on the program
web page.
Prof.
Miles B. Cahill
Director, Economics
Department Honors Program
Thursday,
April 24, 2008, 4:00-5:00, Hogan 403
Mariesa
A. Searles
The
Effects of the Sarbanes-Oxley Act of 2002 on Earnings
Quality
Recipient of the John J. Cummings, Jr./BAI Award for
the best essay or research paper submitted during 2007-2008
on a subject relating to financial institutions.
Abstract
The
Sarbanes-Oxley Act of 2002 (SOX) was enacted into law on
July 30, 2002 after the collapse of WorldCom and Enron.
SOX is designed to enhance the reliability and accuracy
of the financial statements by placing more responsibility
on the management of publicly traded companies. It is believed
that under SOX public companies will have less opportunity
to manage their earnings and commit fraud. In addition,
SOX places further responsibilities on audit firms while
strengthening their independence. The purpose of this study
is to empirically examine within the S&P 500 (1) whether
SOX has improved the quality of the earnings reported in
the financial statements and (2) investigate associations
of firm specific characteristics with earnings quality changes
surrounding SOX. The results indicate that management reports
higher quality earnings after SOX, and the change is negatively
associated with cumulative abnormal stock returns during
the SOX legislative period and size.
Thesis
advisor: Prof.
Karen Teitel
Lauren
Oplinger
Attention! Bankruptcy Shocks
Bond Prices: Impacts on the Credit Derivatives Market
Abstract
This
paper examines the impact of trading in credit default
swaps on the market for high yield bonds. Prior to the
allowance of cash sum settlements by the International
Swaps and Derivatives Association, when a credit event
affected a particular company the credit default swap
contracts were settled by delivering the par valued bond
leading to perverse price effects. This paper explains
key characteristics of bonds and credit derivatives and
then analyzes the impact of the emergence of the credit
default swap market and cash sum settlements of these
swaps on junk bonds. The econometric model includes economic
variables that impact the high yield market place to test
whether the credit default swap index affected the price,
percent change in price, and volatility of the high yield
index. Ultimately, the regression results show that the
emergence of the credit default swap index and the allowance
of cash sum settlements positively affected bond prices.
The credit default swap index negatively affected both
the percent change in price of high yield bonds and the
standard deviation of the percent change in price of high
yield bonds. Although the data set is small, and in particular,
only two years of monthly data exist after the emergence
of the credit default swap index, the results suggest
that the credit default swap index may have had an effect
on the high yield market.
Thesis
advisor: Prof.
Miles Cahill
Friday,
April 25, 2008,
4:00-5:00, Hogan 403
Caitlin
Street
The
Origins of Terror: Affluence, Political Freedom, and Ideology
Recipient of the 2008 Freeman M. Saltus Prize for excellence
in writing essays on labor or economics.
Abstract
This
paper investigates the political, economic, and social
risk factors of international terrorism. This panel cross-country
analysis uses a Poisson regression model to study terrorist
events originating in 229 countries from 1980 to 2004.
The dependent variable is the number of terrorist events
originating from a country in a given five year period.
Results show that civil conflict, education, income, and
ethnic fractionalization have a significant positive effect
on creating terrorism. The study also finds that religious
factors, democracy, and different time periods also have
significant effects on terrorism.
Thesis
advisors: Prof.
Chuck Anderton and Prof.
John Carter
Samuel
Hutchings
Price Discovery on Dow Jones Futures: E-mini vs. Open
Auction
Abstract
The
advent of Internet trading has changed the face of financial
markets. Stocks are now traded on two different media,
the e-mini electronic market and the traditional open
auction market. This paper investigates whether the efficient
market hypothesis still holds for these traded stocks
by examining Dow Jones futures traded in March of 2006.
If the efficient market hypothesis holds, then the price
of the Dow Jones futures should reflect the same information
and, therefore, should have the same price. After it becomes
clear that the same long run efficient price holds for
the e-mini and open auction shares, the paper examines
the effect of price shocks on each medium and the effects
of price shocks in one medium on the other. This is known
as price discovery. Price shocks in the open auction market
have a more lasting effect on the equilibrium price than
those in the e-mini. Shocks in the open auction market
affect the price in the e-mini market, but e-mini price
changes have little effect on the open auction price.
Thesis
advisor: Prof. John F. O'Connell
Class
of 2007 Honors Theses
Full
2007 Program
Class
of 2006 Honors Theses
Full
2006 Program
Class
of 2005 Honors Theses
Full
2005 Program
Class
of 2004 Honors Theses
Full
2004 Program
Class
of 2003 Honors Theses
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