The Price of luck

We find that the vast majority of students taking an advanced undergraduate finance course show a preference for luck in a classroom experiment. In Phase I of the experiment part of the students, group A, were asked to guess a coin toss five times in a row. In Phase II the rest of the students, group B, were given 10 EUR to bet on some of the Group A students taking a second go at guessing a sequence of five coin tosses (Phase III). Group B students’ bets were by default allocated to the worse performing student in Phase I. Switching to better performing Group A students was costly. A total of 23 out of 28 students were willing to pay for switching and thus showed a preference for luck.

Market Index Biases and Minimum Risk Indices

Markets, in the real world, are not efficient zero-sum games where hypotheses of the CAPM are fulfilled. Then, it is easy to conclude the market portfolio is not located on Markowitz"s efficient frontier, and passive investments (and indexing) are not optimal but biased. In this paper, we define and analyze biases suffered by passive investors: the sample, construction, efficiency and active biases and tracking error are presented. We propose Minimum Risk Indices (MRI) as an alternative to deal with to market index biases, and to provide investors with portfolios closer to the efficient frontier, that is, more optimal investment possibilities. MRI (using a Parametric Value-at-Risk Minimization approach) are calculated for three stock markets achieving interesting results. Our indices are less risky and more profitable than current Market Indices in the Argentinean and Spanish markets, facing that way the Efficient Market Hypothesis. Two innovations must be outlined: an error dimension has been included in the backtesting and the Sharpe"s Ratio has been used to select the"best" MRI

Computer-aided system for morphometric mandibular index computation (Using dental panoramic radiographs)

Objective: We propose and validate a computer aided system to measure three different mandibular indexes: cortical width, panoramic mandibular index and, mandibular alveolar bone resorption index. Study Design: Repeatability and reproducibility of the measurements are analyzed and compared to the manual estimation of the same indexes. Results: The proposed computerized system exhibits superior repeatability and reproducibility rates compared to standard manual methods. Moreover, the time required to perform the measurements using the proposed method is negligible compared to perform the measurements manually. Conclusions: We have proposed a very user friendly computerized method to measure three different morphometric mandibular indexes. From the results we can conclude that the system provides a practical manner to perform these measurements. It does not require an expert examiner and does not take more than 16 seconds per analysis. Thus, it may be suitable to diagnose osteoporosis using dental panoramic radiographs.