Portfolio valuation in banks

Frequent references are made to the use of portfolio spread rates in managing financial risks in banks, but indications as to the procedures for determining such rates are very scant.The purpose of this article is to present some initial ideas on the subject: a Standard Funding system indicates what each portfolio should have earned, while an Actual Funding system points out what each portfolio did, in fact, earn; additionally, by comparing the outcomes of the two funding systems for each portfolio, it is possible to determine what each portfolio earned (or lost) in the way of arbitrage.

THE ROLE OF EARNINGS PERSISTENCE IN VALUATION ACCURACY AND THE TIME HORIZON

ABSTRACT Based on the assumption that earnings persistence has implications for both financial analysis and compensation contracts, the aim of this paper is to investigate the role of earnings persistence assuming that (i) more persistent earnings are likely to be a better input to valuation models and (ii) more persistent earnings are likely to serve as a proxy for long-term market and managerial orientation. The analysis is based on Brazilian listed firms from 1995 to 2013, and while we document strong support for the relevance of earnings persistence in financial analysis and valuation, we fail to document a significant relationship between earnings persistence and long-term value orientation. These results are sensitive to different specifications, and additional results suggest that firms' idiosyncratic risk (total risk) is relevant to explain the focus on short-term outcomes (short-termism) across firms. The main contribution of this paper is to offer empirical evidence for the relevance of accounting numbers in both valuation and contractual theories in an emergent market.

Lifestyle factors, direct and indirect costs for a Brazilian airline company

OBJECTIVE To analyze lifestyle risk factors related to direct healthcare costs and the indirect costs due to sick leave among workers of an airline company in Brazil. METHODS In this longitudinal 12-month study of 2,201 employees of a Brazilian airline company, the costs of sick leave and healthcare were the primary outcomes of interest. Information on the independent variables, such as gender, age, educational level, type of work, stress, and lifestyle-related factors (body mass index, physical activity, and smoking), was collected using a questionnaire on enrolment in the study. Data on sick leave days were available from the company register, and data on healthcare costs were obtained from insurance records. Multivariate linear regression analysis was used to investigate the association between direct and indirect healthcare costs with sociodemographic, work, and lifestyle-related factors. RESULTS Over the 12-month study period, the average direct healthcare expenditure per worker was US$505.00 and the average indirect cost because of sick leave was US$249.00 per worker. Direct costs were more than twice the indirect costs and both were higher in women. Body mass index was a determinant of direct costs and smoking was a determinant of indirect costs. CONCLUSIONS Obesity and smoking among workers in a Brazilian airline company were associated with increased health costs. Therefore, promoting a healthy diet, physical activity, and anti-tobacco campaigns are important targets for health promotion in this study population.

Estudo da ação do moluscocida (Bayluscide-SRB) da Dynatech R/D Company em lagos do nordeste brasileiro - Sergipe, Brasil

To study the action of molluscicide nine ponds were selected: 3 of them lying in Maruim municipality, 29 km far from north Aracaju, the State capital, and 6 ponds in Itabaianinha municipality, 118 km far from south Aracaju. This study was carried out for 16 months. Environmental parameters observed were those thought to have any influence on the planorbids and/or the molluscicide: water temperature, transparence, salinity, pH, dissolved oxygen, CO2, and the nutrients-phosphorus, nitrogen, potassium and calcium. Plancton microorganisms were also considered to observe Bayluscide action on them. SRB was used in a concentration of 6.25 kg per 1.000 [cubic metres] water, to achieve 1.0 ppm Bayluscide concentration according to the producer's instruction in Massachussett-USA.

Valuation models and Simon's bounded rationality

This paper aims at reconciling the evidence that sophisticated valuation models are increasingly used by companies in their investment appraisal with the literature of bounded rationality, according to which objective optimization is impracticable in the real world because it would demand an immense level of sophistication of the analytical and computational processes of human beings. We show how normative valuation models should rather be viewed as forms of reality representation, frameworks according to which the real world is perceived, fragmented for a better understanding, and recomposed, providing an orderly method for undertaking a task as complex as the investment decision.