Asian Journal of Economics, Finance and Management
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Stochastic Pricing of European Options Using the Black-scholes Model on the Analysis of Share Prices for Capital Markets
Get PDFFinancial instruments used in the capital market to finance long-term investments are stocks and shares, company bonds and government bonds. This involves the issue and market of shares, bonds and debentures using the services of brokers, dealers and underwriters. The capital market provides a means through which this is made possible. However, the paucity of long-term capital has posed the greatest challenge. This study is about option pricing and some of its dynamics in financial markets via valuation using the Black-Scholes (BS) model, as it explores the changes of option values as a function of security and time. The study is based on Stochastic Differential Equations and the Black-Scholes Model. The findings revealed that the Black-Scholes model of European options on the share price of Fidelity, Access and their future merged banks, which gave closed-form prices of Call and Put option prices with variations of maturity dates, average share prices, as well as their respective standard deviations affecting real-life changes for capital markets. From the share price analysis, the growth rates of each bank were considered, where Fidelity Bank had the largest growth rates, as this is informative to investors or management of the banks in terms of decision making. This paper offers a reflective consequence for future studies of option prices. However, the current study is on the European options case. Another study could be considered in the case of multiple options in one portfolio of investments
The Economic Impact of Government Intervention in Public Transport System: A Case Study of the Uduaghan Bus Scheme in Delta State, Nigeria
Get PDFThis study investigated the Economic benefit of government intervention in public transport system with direct focus on the Uduaghan Bus Scheme which was introduced during the administration of Dr. Emmanuel Eweta Uduaghan which lasted from 2007 to 2015 in Delta State, Nigeria. The core aim of this paper is to address economic relevance of government intervention in urban/rural transportation system and the challenges regarding mass transit in Delta State. This Uduaghan initiative introduced 300 bus units to provide cost-effective, reliable and efficient transportation, thereby relieving traffic congestion associated with informal transport systems that are otherwise very costly in terms of safety and economic considerations. The study adopted mixed-method research, employing a combination of survey data and qualitative interviews to evaluate commuter/citizens satisfaction, operational efficiency and economic impacts of the Uduaghan Bus Scheme. The study results revealed that while the Uduaghan Bus Scheme has improved public transportation system, it still suffers from high operability setback which had considerably tilted the balance in favour of this scheme so far. This study concludes that there is drastic reduction in cost of transportation across board, easy accessibility to the urban and rural areas, and state-of-art transport vehicles within study period. Based on the findings of this study, it is recommended that; Nigeria government should subsidize the public transportation scheme through the provision of government transport bus scheme and provide quicker solution to its operational efficiency
Investing in Sub-Saharan Africa: The Role of Internal Macroeconomic Factors and Institutional Quality in FDI Growth
Get PDFThe level of foreign direct investment drawn by developing countries like those in the sub-Saharan Africa is influenced by various internal macroeconomic factors and internal institutional indicators inherent in the specific country or region. However, FDI inflow to Sub-Sahara African (SSA) region are much lower when compared to countries in other regions of the world due to lack of investor confidence in Sub-Saharan Africa's economic prospects and investment climate characterized by institutional weakness and macroeconomic instability. Therefore, this study aimed at examining the effect of internal macroeconomic factors and internal institutional quality indicators on foreign direct investment in Sub-Sahara Africa. The study adopted ex-post facto research design. Top 10 recipients of FDI in Sub-Sahara Africa formed the sample of the study. Data were sourced from World Governance Indicators (WGI) and World Development Indicators (WDI) between 1996 and 2023. To address the problem of endogeneity in the dataset, the study employed dynamic panel autoregressive distributive lag (PARDL) model for the analysis. The results showed that trade openness, foreign reserve, exchange rate and regulatory quality have significant short- and long-run positive effects on FDI, while external debt, political stability and control of corruption have significant short- and long-run negative effects on FDI. The study concluded that internal macroeconomic and institutional factors affect FDI in sub-Saharan Africa. Therefore, the study recommended that investors should focus on investing in Sub-Saharan African countries with stable macroeconomic environments, strong institutional frameworks, and policies that promote trade openness, regulatory quality, and political stability, as these factors create the most favourable conditions for long-term investment growth
Impact Assessment of Carbon Management Accounting on Performance of Listed Manufacturing Firms in Nigeria
Get PDFThe present study explores how Carbon Management Accounting (CMA) is associated with the financial performance of the listed manufacturing firms within the Nigerian context to investigate the ever-increasing need of sustainable business processes in the wake of financial risks posed by the climate crisis. The study is also impelled by the necessity to explain how the practice of CMA can be used as a strategic measure in ensuring environmental responsibility as well as economic effectiveness in the manufacturing industry of Nigeria. A purposive sample of 10 manufacturing companies listed publicly was selected and the secondary data was extracted during the five-year period (2019-2023). The research witnessed the use of descriptive statistics and regression analysis to study the correlation between particular practices of CMA and the performance of the firm. The findings show that intensities of carbon emission accounting, renewable energy adoption, and implementation of carbon pricing substantially have a positive impact on financial performance. The greatest positive impact was delivered by the implementation of carbon pricing so this approach can be regarded as a strategic lever that may help to improve the profitability rate and guarantee a sustainable environment. There are three contributions to the study namely; the study offers an empirical study regarding the role played by CMA in enhancing performance of firms in a developing economy setting; suggests a composite CMA model relevant to the manufacturing companies of Nigeria; and provides useful policy guidelines to be implemented by the regulating authorities such as implementing the carbon disclosure standards, encouraging renewable energy investment and incorporation of carbon pricing into the company planning. Equating the financial goals with the environment stewardship, CMA can become a two-fold method to maintain economic strength and to go eco-friendly. The study recommends that proactive involvement of policymakers, corporate boards, and environmental regulators would be warranted to mainstream CMA practices in Nigeria in realising sustainable industrial development
Integration of Enterprise Resource Planning Systems and Supply Chain Efficiency at National Medical Stores
No full textThis study examined the relationship between change management in Enterprise Resource Planning (ERP) system and supply chain efficiency at National Medical Stores (NMS). A correlational research design was adopted, and data were collected from 73 respondents through structured questionnaires and interviews. System integration showed a strong positive correlation with supply chain efficiency (r = .759, p < 0.01), indicating that well-integrated ERP modules play a crucial role in streamlining supply chain operations. The study concluded that seamless system integration is a key enabler of supply chain efficiency at NMS. It recommended that NMS strengthen system integration efforts to ensure successful ERP implementation and enhanced supply chain performance
Application of Markov Chain Movements in Finite State on Monetary Policy Shocks of Economic Variables
No full textMarkov Chain provides a useful tool for modeling and analyzing the dynamics of monetary policy decisions. In particular, the data series were transformed into 3-step transition probability matrix solutions to cover independent categories of Nigerian Economy Growth policies. The inflation, unemployment and gross domestic trade rates series were used as column vector matrices where the least three data series were chosen. From the stochastic analysis of the problems captured the dynamics of monetary policy decision-making, including the likelihood of switching between reduce state, increasing state and no-change state all in finite state. The impact index factor on monetary variables were effectively obtained and compared which showed the highest of 0.24% reducing impact of Gross Domestic trade rates on Gross Domestic product(GDP) at current market price. Finally, other statistical variations such as mean, kurtosis and skewness were considered and discussed in this paper. This informs Nigerians on the effectiveness of different monetary policy strategies and their various impacts on the economy for the purpose of investment plans
Firm Characteristics and Financial Stability of Commercial and Service Firms Listed at the Nairobi Securities Exchange, Kenya
No full textThe study sought to investigate how the characteristics of companies trading at the NSE impact their performance in Kenya. The research was anchored by stakeholders’ theory and efficiency structure theory and liquidity shiftability theory. The target population was the 12 currently active businesses that are listed on the Nairobi Securities Exchange and a census approach was used. The survey concludes stating the significant effect of operational efficiency on financial stability, underscoring the critical role that efficient operations play in ensuring the long-term viability and performance of firms in the Kenyan market. Therefore, firms that are able to optimize their processes, reduce costs, and enhance productivity are more likely to achieve greater financial stability and resilience in the face of economic challenges. It was concluded that capital levels do not play a significant role in determining the financial stability of the firms. It was concluded that the alteration in the liquidity levels if the firms play an irrelevant role in determining the firms’ financial stability. It was concluded that firm size does not play a significant role in determining the firms’ financial stability. Management of NSE should encourage the development and implementation of industry-wide standards and best practices for operational efficiency in commercial and service firms. The management of NSE should encourage commercial and service firms to adopt robust liquidity risk management practices, including regular monitoring of cash flows, stress testing, and contingency planning. Provide guidance and support to firms in developing effective liquidity risk management frameworks to ensure they are adequately prepared to handle liquidity challenges. The management of NSE should shift the regulatory focus from firm size as a determinant of financial stability to a more comprehensive and risk-based approach
Change Management in Enterprise Resource Planning Systems and Supply Chain Efficiency at National Medical Stores
No full textThis study examined the relationship between change management in Enterprise Resource Planning (ERP) system and supply chain efficiency at National Medical Stores (NMS). The study was underpinned by the systems theory by Ludwig von Bertalanffy. A correlational research design was adopted, utilizing a mixed methods approach and data were collected from 73 respondents through structured questionnaires and interviews. Change management demonstrated a very weak and negative correlation with supply chain efficiency (r = –.058, p > 0.01), implying that current change management practices may not be effectively supporting ERP-driven improvements. The study concluded that inadequate change management is limiting the full potential of ERP implementation. It recommended adopt more strategic and inclusive change management approaches to ensure successful ERP implementation and enhanced supply chain performance
Financial Resilience and Educational Recovery Post-COVID-19: A Logistic Regression Analysis of Household Determinants in Kenya
No full textThis study examines how household financial resilience influenced school resumption in Kenya following the COVID-19 pandemic, focusing on three dimensions: ability to manage daily needs, cope with shocks, and invest in the future. The analysis uses secondary, nationally representative data from the 2021 Financial Access Survey, covering 22,024 households, and applies a logit model to estimate the likelihood of school resumption. Marginal effects were calculated using the Delta-method to provide interpretable estimates of the size and direction of influence for each variable. The findings show that forward-looking financial capacity, particularly the ability to invest in the future, is strongly associated with higher school resumption rates, increasing the likelihood by 0.4% (p < 0.001). Conversely, households unable to withstand shocks, those living in poverty, and those with larger numbers of dependents were significantly less likely to send children back to school, with each of these factors reducing the likelihood by about 1%. The education level of the household head emerged as a positive and significant factor, while gender, age, marital status, and stated household priorities were not statistically significant predictors. Although the model’s explanatory power was modest (pseudo-R² = 0.057), its statistical robustness (χ² = 12,796.001, p < 0.001) confirms the reliability of these patterns. The study recommends embedding education financing within broader household financial resilience strategies. Key actions include promoting education-linked savings, expanding support for poor and large households, integrating education planning into community programs, and strengthening social protection. In addition, community-level interventions need to reinforce the value of education, even during economic shocks. Collectively, these measures would help reduce household vulnerability to crises and safeguard children’s right to uninterrupted learning
Business Taxation and Profitability of Agrochemical Dealers in Nairobi City County, Kenya
No full textThe profitability of agrochemical dealers is essential for the sustainability of Kenya’s agricultural sector, a cornerstone of the national economy. However, between 2018 and 2024, leading agrochemical firms reported a decline in profit margins by approximately 8%. This study assessed the effect of business taxation on the profitability of agrochemical dealers in Nairobi City County, focusing on four tax categories: Value Added Tax (VAT), corporate tax, excise duty, and import levy. The study was guided by the theories of optimal taxation, the Laffer Curve, and profit maximization. A causal (explanatory) research design was adopted, targeting 110 registered agrochemical dealers. Data were collected through structured questionnaires, following a pilot test and reliability checks. Quantitative analysis involved descriptive statistics and inferential methods, including correlation and multiple regression. The results revealed that all tax types had a statistically significant negative impact on profitability, with VAT having the strongest effect (β = -0.483, p < 0.001). The regression model explained 62.7% of the variance in profitability (R² = 0.627). The study concluded that high tax burdens significantly constrain profitability in the agrochemical sector. It recommends tax reforms such as graduated tax rates, VAT exemptions for essential inputs, and incentives for local manufacturing. Agrochemical dealers are also encouraged to adopt strategic pricing, local sourcing, and sound tax planning to enhance profitability