Dissertation Proposal: Accounting Finance Risk - Paper Example

The financial theory depicts risk assessment as a standout amongst the essential aspect in the process of making the decision in investments. Though, to adequately recognize a risk, it is imperative for the investors to illuminate the information from the market.

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The research question for the paper include:

What is the principal objective of this study the relationship between the market risk over time and accounting information?

How do the accounting variables and the beta value can be applied by the for investors in Mauritius?

Research Objectives

The objective of the research is to:

Analyze the share price of SEM and primary accounting ratios to assess the financial position, with the perspective of answering the research question

Examine if the investors will be able to develop confidence with beta when making a choice on SEM.

Recognize the connection between market return, risk, and financial ratios; appraisal of the various business level where there is the absence of financial information and to direct investment in gauging the methodical in non-listed as well as the private companies in Mauritius.

Literature review

This part examines the commonly applied financial models in the evaluation of the risk of the stock as well as the stock market and the corresponding return. I will include a summary of the focal financial ratios that are necessary for the analyzing of the financial performance, financial risk, and the form's value. Lastly, the summary inclusion of the market-based models and accounting tools to determine the returns.

Research Methodology

This section builds up the methodology and models that will be of the essence in analyzing and understanding the correlation and variation in the market beta respective to the market returns and financial ratios. The model will also be applied in estimating the methodical market risk with the addition to the firms that are quoted on the SEM. It is in the domain of examining the connection of accounting ratios risk with the assessing the accounting ratios significance in the process of making the decision.

The Research Methodology will include the following:

Collecting of accounting information from the financial data

Method conducted

Evaluating Market Measure of Systematic Risk

Determining Return of Individual Securities

Market Return

Data used

SEM, SEMTRI, and SEMDEX

Structure of the report

This paper is structured as follows:

Chapter 2 is the literature summary regarding accounting tools, market-based models, and risk measures in assessing the performance as well as the risk. Likewise, it surveys the practical research on the SEM together with the same markets.

Chapter 3: creates the forms that need to be applied during the evaluation of the correlation among accounting ratios and methodical risk. Additionally, summarizing the sample data and methodology that is implemented in the appraisal.

Chapter 4: discusses the significant ideas from the study.

Chapter 5: Conclusion.

Limitation

However, the aim of the research has been attained; there was some limitation that hindered the smooth research to be conducted. A few of the financial experts in some firms refused to avail their strategy of assessing the stock markets. Secondly, the financial statements that were provided were inaccurate hence leading to incorrect accounting calculation during the research.

References

Agathee, U. S. (2008). Day of the week effects: Evidence from the stock exchange of Mauritius (SEM). International Research Journal of Finance and Economics, 17(34), 8-14.

Bekaert, G. and Harvey, C.R., 1997. Emerging equity market volatility. Journal of Financial Economics, 43(1), pp.29-77.

Bundoo, S.K., 2008. An augmented Fama and French three-factor model: new evidence from an emerging stock market. Applied Economics Letters, 15(15), pp.1213-1218.

Clark, R. A. (1998). Africa's emerging securities markets: developments in financial infrastructure. Westport, Conn. [u.a.], Quorum Books.

Ericson, R.V., Baranek, P.M., and Chan, J.B., 1991. Representing order: Crime, law, and justice in the news media (pp. 3-4). Milton Keynes: Open University Press.

Hafer, R. W., & Hein, S. E. (2007). The stock market. Westport, Conn. [u.a.], Greenwood Press.

Irving, J. (2005). Regional integration of stock exchanges in Eastern and Southern Africa: progress and prospects. [Washington, D.C.], International Monetary Fund, African, and International Capital Markets Depts. http://public.eblib.com/choice/publicfullrecord.aspx?p=3014304.

Koller, T., Goedhart, M. H., Wessels, D., & Copeland, T. E. (2010). Valuation: Measuring and managing the value of companies. Hoboken, N.J., John Wiley & Sons, Inc.

Koralun-Bereznicka, J. (2013). Corporate performance: a ratio-based approach to country and industry analyses. Cham, Springer. http://site.ebrary.com/id/10715788.

Saunders, A. and Cornett, M.M., 2014. Financial institutions management. McGraw-Hill Education