Soil Fertility Is a Productive Capital Asset

In recent years, the understanding of human health has progressed considerably, through the study and understanding of the symbiotic role played by the myriad microorganisms that populate the gut and do the digesting, and populate the skin and keep it healthy, and even populate the lining of the lungs and do the same. In plant life, it is the microorganisms in the soil—which “are” the soil’s fertility—which fulfil a similar symbiotic role in a healthy plant’s life, but as yet this is a subject most visible by its absence from all scientific discussion of good farming practice. The science underlying this understanding is summarised in this paper. Understanding this and nurturing the fertility of impoverished soil by “seeding it” with the appropriate mix of microorganisms is transformational for plant health and productivity. Significant results are indicated from early trial examples of doing this in rice, oil palm and tobacco cultivation in Malaysia.

International Financial Market＇s Integration and Modelling Returns of Risky Assets

The aim of this paper is to test the ability of conditional and unconditional capital asset pricing models （CAPMs） and to explain emerging markets returns in terms of their integration into the international market. The authors use data on five developed countries and five emerging countries as well as data on the Tunis Stock Exchange （TSE） after the reforms. The results show that the correlations between emerging markets returns and developed markets returns are very low and sometimes negative. Conditional arbitrage pricing theory （APT） as well as conditional CAPM has low predictive power for emerging markets than that for developed markets. Finally, following the financial reforms, Tunisian financial markets have became more and more integrated into the international market （excess returns and unconditional beta consistent with predictions）. However, conditional APT does not accurately explain Tunisian market returns. This study confirms the unavailability of an accurate modelling technique of the TSE structure.

The Determinants of Capital Structure： an Empirical Study of Publicly Listed Medicine Manufacturing Companies in China

This paper attempts to analyze the important determinants of capital structure in the medicine manufacturing industry of China. Two measures including the ratio of long-term debt to asset and the ratio of total debt to asset are used as the proxies of leverage, while dependent variables used are asset structure, growth, firm size, profitability and risk. The evidences presented here indicate that asset structure and size significantly influence the capital structure choice.

Coping with Pressures of Modernization by Traditional Farmers: a Strategy for Sustainable Rural Development in Yunnan, China

Traditional farming practices conform to sustainable rural livelihoods, while agricultural modernisation tends to undermine these practices through various perturbations. A case study in Tengchong County (western Yunnan, China) shows that transformation of traditional alder (Alnus nepalensis) and dry rice (upland rice) rotational farming to introduced Chinese fir (Cunninghamia lanceolata (Lamb.) Hook.) plantations leads to localised water scarcity and soil fertility decline. While farmers are aware of ecological sustainability of traditional farming, they prefer Chinese fir forestry because it is less labour-intensive, has a high market value, and releases time for profitable off-farm work. Farmers adapt to economic liberalization by planting high value crops and trees. However, alternatives to make local agricultural production more profitable through competitive business strategies, cooperative approaches, innovations in integrating high value crops and 'downstream' processingfor sustainable rural livelihoods have been overlooked largely due to poor information availability and lack of organisational framework.

Does the EVA valuation model explain the market value of equity better under changing required return than constant required return?

Through the Economic-Value-Added(EVA)valuation model,the expected market value of equity can be determined by adding the book value of equity with the present value of expected EVAs under the assumption of constant required return and constant return on equity.The equation of EVA valuation model has taken its shape under the assumption of constant required return and constant return on equity.However,a large body of empirical evidence indicates that required rate of return never remain constant.The EVA-valuation model formulated under constant required return cannot be implemented under the scenario of changing required return.In this study,we explored whether the EVA valuation model could be implemented under changing required return by making any changes in the model and found that it could be implemented under the scenario of changing required return by replacing the book value of the equity of the existing model with the present value of required earnings or normal market earnings.We further examined whether the explanatory ability of the EVA valuation model under the assumption of changing required return is better than that of the valuation model under the assumption of constant required return.Relative information content analyses were conducted by considering sample of the intrinsic value of equities determined by valuation models and the market value of equities of 69 large-cap,88 mid-cap,and 79 small-cap companies.The results showed that the EVA-based valuation model with changing normal market return outperformed the EVA-based valuation model with constant required return.

Evaluation of Deposit Insurance Fund Adequacy Using Credit Risk Model--An Indian Experience

There are two methods widely used for evaluating the adequacy of Deposit Insurance Fund： （i） Target Reserve Ratio and （ii） Credit Risk Model. Target Reserve Ratio is one of the macro level indicators more often set by Regulatory act on the basis of minimum Deposit Insurance Fund margin safety, Target Reserve Ratio is calculated as the ratio of Deposit Insurance Fund to the value of insured deposits. However, TRR does not take into consideration the level of Deposit Insurance potential liability, the Loss at Given Default （LGD） and the historical trend of default rate prevailing among the insured banks. It does not also consider the present condition of the economy and current scenario of the banking sector. This paper discusses primarily about development of Credit Risk Model for evaluating the Deposit Insurance Fund Adequacy. For this purpose, Econometric Credit Risk Model was developed based on the historical data of bank failures and the associated losses of the last 25 years from 1990-91 to 2014-15. The model assesses various possible factors impacting the Deposit Insurance Fund： Default rate, Deposit growth, Exposures, impact of macro-economic factors like GDP, GDS, Inflation and Interest rate changes, etc. on the Deposit Insurance Fund through econometric modeling. The model evaluates the adequacy of Deposit Insurance Fund under both （i） Normal scenarios where there is no （economic） systemic risk assumed and （ii） Worst case scenario at 1% level of significance using Monte Carlo Simulation. Since the model empirically validates all the critical factors impacting the assets and liabilities associated with Loss at Given Default, the model output can also be used to determine a suitable Target Reserve Ratio and such models are being used in countries like USA, Canada, Hong Kong, and Singapore, etc. （IADI, 2009）. More importantly, the model outputs are quite useful in determining the adequacy of deposit insurance fund which is an effective risk control measure that organization like Deposit Insurance Credit Guarantee Corporation （DICGC） can adopt both under normal economic scenario as well as worst case scenario, ensuring a strong financial safety net for the banking sector in India. The model also assesses the default probability and the Loss at Given Default of different types of banks： commercial banks, rural banks, cooperative banks, foreign banks, etc. A risk based on premium can possibly be determined for each type of banks in India.

Empirical analysis on risk of security investment

The paper analyzes the theory and application of Markowitz Mean-Variance Model and CAPM model. Firstly, it explains the development process and standpoints of two models and deduces the whole process in detail. Then 30 stocks are choosen from Shangzheng 50 stocks and are testified whether the prices of Shanghai stocks conform to the two models. With the technique of time series and panel data analysis, the research on the stock risk and effective portfolio by ORIGIN and MATLAB software is conducted. The result shows that Shanghai stock market conforms to Markowitz Mean-Variance Model to a certain extent and can give investors reliable suggestion to gain higher return, but there is no positive relation between system risk and profit ratio and CAPM doesn＇t function well in China＇s security market.

Discount Rate of China’s New Energy Power Industry

Under the dual pressures of energy crisis and environmental pollution,China’s new energy power industry has become a focal point for environmental management and requires greater investment.In this context,as a significant input of investment projects,discount rate requires a well-calibrated evaluation because new energy power investment projects are highly capital intensive.The main objective of this paper is to evaluate the discount rate of China’s new energy power industry.First,we use Moving Average to correct the parameters of capital asset pricing model(CAPM)and weighted average cost of capital,which extends the literature on the avoidance of CAPM noise information problem.Second,we study the industry-level annual discount rates of mainly China’s new energy power industries,including hydropower,nuclear power,wind power,and photovoltaic power industries for the period of 2014-2019.The results show that discount rates in China’s new energy power industries evolved differently between the years of 2014-2019 with average annual discount rates being 7.56%,5.83%,5.60%,and 8.64%,for the hydropower,nuclear power,wind power,and photovoltaic power industries,respectively.In 2019,the four annual discount rates were highest for the photovoltaic power industry(8.66%),followed by hydropower(7.17%),wind power(5.72%),and nuclear power industry(5.26%).Forecasting to 2020 from the 2019 evaluation base period,the discount rates are 6.37%,5.00%,6.57%,and 9.05%for the photovoltaic power,hydropower,wind power,and nuclear power industries,respectively.Under the different capital structures,their forecasts for the photovoltaic power,hydropower,wind power,and nuclear power industries in 2020 are,respectively,within[4.35%,9.24%],[3.92%,7.10%],[4.58%,10.40%],[5.46%,14.81%].We also discussed more details on capital structure and forecast period of discount rates for China’s new energy power industries.Our analysis shows that it is necessary to establish a new energy power industry database and steadily promote the implementation of policies.

A Theoretical Examination of Untaxed Entities and Taxed Entities in the Market for Commercial Real Estate

This paper is a theoretical examination of untaxed and taxed entities that invest in real estate. The standard advice to real estate investors is to avoid using entities that are subject to taxation （such as C corporations） and employ entities that are not subject to taxation （such as limited liability companies, S corporations, and real estate investment trusts） in order to avoid double taxation of income. This paper shows that, in most situations, untaxed entities place a greater value on a given real estate property than a taxed entity does, which implies that taxed entities are at a distinct disadvantage at competing in the market for property. However, this conclusion is reversed if untaxed entities use a large amount of financial leverage compared to taxed entities and the borrowing rate for both is greater than the risk-free rate.

A Research of China Stock Market by Capital-Asset Pricing Model

Capital Asset Pricing Model (CAPM) is an important investment portfolio model,which is developmented from Markowitz’s investment portfolio theory. This paper initially verifies CAPM by means of the statistical regression analysis on the data in Shanghai stock exchange, including 164 kinds of going public stocks, from September 1992 to October 1994. The paper analyzes the current situation of China stock exchange and suggests how to develop its trade.

The Analyses of Risk Premium and the Model Revisions About Capital Asset Pricing Models

The pricing theories of capital assets are the principal part in the modern financial theories. Presently, the capital asset pricing model and the arbitrage pricing theory, including their evolutional forms, all don＇t embody the premium of non-system risks and non-factor risks. This paper analyses the risk reward of traditional capital assets pricing models, revises the traditional capital assets pricing models, and advances the revised models of capital assets pricing theories basing on full-risk reward.

Currency Exposure in China under the New Exchange Rate Regime： National Level Evidence

The present paper studies China＇s national level currency exposure since 2005 when the country adopted a new exchange rate regime allowing the renminbi （RMB） to move towards greater flexibility. Using generalized autoregressive conditional heteroskedastic and constant conditional correlation-generalized autoregressive conditional heteroskedastic methods to estimate the augmented capital asset pricing models with orthogonalized stock returns, we find that China equity indexes are significantly exposed to exchange rate movements. In a static setting, there is strong sensitivity of stock returns to movements of China＇s trade- weighted exchange rate, and to the bilateral exchange rates except the RMB/dollar rate. However, in a dynamic framework, exposure to all the bilateral currency pairs under examination is significant. The results indicate that under the new exchange rate regime, China＇s gradualist approach to moving towards greater exchange rate flexibility has managed to keep exposure to a moderate level. However, we find evidence that in a dynamic setting, the exposure of the RMB to the dollar and other major currencies is significant. For China, the challenge of managing currency risk exposure is looming greater.

A CCAPM with Time-varying Betas and Its Applications in Chinese Stock Market

Investors usually require premiums to compensate those components of risk that cannot be diversified away. Investors＇ risk premiums is changing with the business cycles. In this paper we study the CCAPM allowing for the time-varying beta. The timevarying betas are estimated from GARCH model. From the estimation results, we can see that the systematic risk coefficient betas of certain industry change when the volatility changes.