A multiple-choice test consisting of twenty items, designed to reveal the existence of misconceptions or difficulties in the understanding of physical concepts, was administered to 33 first-year ...physics students at Rhodes University, 460 matriculation pupils studying physics or physical science in schools in the Eastern Cape Province, and 65 teachers from three of the provinces. The results suggest that certain misconceptions might be widely held among the students and pupils tested, and that these are shared to some extent by the teachers. Possible reasons for the prevalence of these misconceptions are considered, such as errors in textbooks and examination papers, and a mismatch between the demands of the syllabus and students' intellectual development.
The research dealt with hedging accounting in light of the application of the financial reporting standard IFRS9. Hedging came in this standard, which was an alternative to the previous ...financial instruments standard IAS 39. Hedging is to confront the risks that economic units may be exposed to in the instability of financial markets, and its purpose is to reduce or reducing these risks and relying on banks to distribute their risks through their adoption of financial instruments. Therefore, this research came to address the issue of hedging cash flows generated from these financial instruments in light of the application of Financial Reporting Standard 9.
Summary
The paper proposes a sequential Bayesian updating approach to estimate default probabilities on rating grade level for no‐ and low‐default portfolios. Bayesian sequential updating enables ...default probabilities to be obtained also for those rating grades for which no defaults have been observed. The advantage of this approach is that it preserves the rank order of rating grades in the case of no defaults. Rank preservation is not ensured when using an identical prior distribution across all rating grades. We discuss Bayesian sequential updating for the beta–binomial model and a model incorporating the asymptotic single‐risk factor model of the Basel Accord. Practical aspects such as incorporating information from external sources and the margin of conservatism are addressed.
This paper proposes a new method to model loss given default (LGD) for IFRS 9 purposes. We develop two models for the purposes of this paper—LGD1 and LGD2. The LGD1 model is applied to the ...non-default (performing) accounts and its empirical value based on a specified reference period using a lookup table. We also segment this across the most important variables to obtain a more granular estimate. The LGD2 model is applied to defaulted accounts and we estimate the model by means of an exposure weighted logistic regression. This newly developed LGD model is tested on a secured retail portfolio from a bank. We compare this weighted logistic regression (WLR) (under the assumption of independence) with generalised estimating equations (GEEs) to test the effects of disregarding the dependence among the repeated observations per account. When disregarding this dependence in the application of WLR, the standard errors of the parameter estimates are underestimated. However, the practical effect of this implementation in terms of model accuracy is found to be negligible. The main advantage of the newly developed methodology is the simplicity of this well-known approach, namely logistic regression of binned variables, resulting in a scorecard format.
At present, computational methods have received considerable attention in economics and finance as an alternative to conventional analytical and numerical paradigms. This Special Issue brings ...together both theoretical and application-oriented contributions, with a focus on the use of computational techniques in finance and economics. Examined topics span on issues at the center of the literature debate, with an eye not only on technical and theoretical aspects but also very practical cases.
PDF
