Saturday, September 8, 2012

BUS552 How to Convert PPT to Video file on Windows 7

At CALMAT, professors sometimes asks us to post video presentations on YouTube. You can do so by using PPT and Windows Movie Maker. It takes a few steps on Windows XP. However, the same procedure cannot be applied on Windows 7.

Fortunately, the conversion on Windows7 was much simpler than the one on XP.
Only MS PowerPoint 2010 is necessary. (Windows Live Movie Maker was not needed at all!)

OS: Windows 7 (If XP, it's done in a different way)


1) Create PPT slides and add narration.
2) Save as "Windows Media Video."
3) Take a few minutes to create .wmv file. Just wait until it's done.
4) Upload .wmv file to YouTube (takes a few minutes)

Optionally, you can edit video or add background music using Windows Live Movie Maker. My point is, narration [deleted extra space] cannot be added through Live Movie Maker, so that [delete] you need to add it on PPT to create WMV file first.


- Narration volume can be adjusted by editing video menu through Live Movie Maker.
- Background music volume can be adjusted by editing music menu through Live Movie Maker.
  • Note that YouTube supports the following format of video data to upload:


  • The file must be less then 15 minutes for free YouTube account 

It is up to you to create which format of the video file while here I would introduce you how to create .AVI file using a free screen capture tool for Windows.

1) Try downloading CamStudio

2) Launch CamStudio to capture a screen video
See this:

3) How to setup CamStudio to specify the directory to store the video file

  • The above method can be used to capture your Skype discussion as well.

Saturday, September 1, 2012

Open Yale Lecture 11



Outstanding Share / You own shares è % ratio of owner ship
Split è (own shares) x split è To keep the value in a certain (reasonable) range i.e. $20-$40
Important Terms to understand:
·         Dilution
·         Dividend (Cash sent out to share holders)
·         Stock dividend è Not cash, no meaning for investors

For Profit Corporation exists for share holders (== make money for them)
Earnings per Share
Payout ratio = dividend/earning
Stock Repurchase
Liquidation/Sale of Co

Open Yale Lecture 10

Debt Markets: Term Structure


Keys: Interest rate, bonds, discount bonds, coupon, inflation index bonds

Discount bond
Principal $100
Price (you pay) $100 – discount

Treasury build
P = 100 - 99.58 = 2.510 x 60 /360 Discount rate
2.563 = (1/.9958 -1) x 366/60 Investment rate
Bills <= 1 year
Notes 1-10 years
Bonds 10+ years

Coupon C
Principal 100
Pay C/2 every 6 months
P = c/2(1/(R/2 ) – 1/(1 + R/2) ^ 2 + 1/R/2 + 100 * 1/(1+R/2) ^2T

Term Structure
FMI) A yield curve displaying the relationship between spot rates of zero-coupon securities and their term to maturity.

Read more:
Price of time
Theory of Interest
Prof. Irving Fisher
Irving Fisher Diagram

Forward rate
1939 JR Hicks Invented
The forward rate is the future yield on a bond. It is calculated using the yield curve. 

Friday, July 27, 2012

Open Yale Lecture 8

Human Foibles, Fraud, Manipulation, and Regulation


Today’s topic was Regulation.

1.                Wishful thinking – i.e. Election, game, investment
2.                Attention Anomalies  - Social bases,
3.                Anchoring
4.                Representativeness Heuristic
5.                Gambling behavior
6.                Magical thinking   - BF Skinner
7.                Quasi Magical thinking  Shafir + Tversky

Temptations of Market
1.                Oversell
2.                Hide info
3.                Loyalty to friends

Louis Brandeis
1914 Other people’s money
Disclosure of truth

ð  States “Blue Sky Laws”

1920s Telephone  spread
Boiler Rooms
1934 Securities  + Exchange Commission  (SEC)   
                        Business ßà SEC

William O Douglas
“Democracy and Finance” 1940  - Finance for people
Legal Realism

Public + Private Securities

Public Company à Must disclose info (Regulation by  Edgar

Hedge Fund – Private investment company  -- Low profile

99 investors
Accredited investors

500 investors
Qualified purchasers

Insider + Outsider
Regulation FD - 2000 … Full Disclosure - SCC
Market Surveillance

1995 IBM – Lotus … Insider trading

Financial Accounting regulation
Standard Board FASB - 1975
Net Income
Operating income

Other Standards
Core earning
Pro form

Balance Sheet : Asset T Liabilities
Off-balance sheet accounting … Enron Corp
                … Remove risky investment from the balance sheet by putting them in balance sheet of child/dummy companies
SIV – Structured Investment Vehicles

Securities Investor protection Corporation  - 1970

FDIC Fed Dep Ins Corp – 1934
Currently $100,000

Conclusion: Need to keep improving regulation to protect small investors.

Wednesday, July 25, 2012

Open Yale Lecture 7

Behavioral Finance: The Role of Psychology


Newer revolution of finance

Behavioral finance = Reaction against to 1) Mathematical finance 2) Efficient market

Over confidence

Kahneman + Tversky
Prospect Theory  (1979)
How people make choices
Replaces Expected Utility Theory  
Weighting Function
Distort probability

Expected Util Theory çà Prospect Theory
Mental Compartment 


If coin is head – you get $200
If coin is tail – you pay $100
Probability 50% Gain > Loss
Would people buy the rotary ticket?

Today’s topic was behavioral finance.

The theory is replacing the previously presented theories such as 1) Math modeling of expected returns 2) Efficient market hypothesis – information based random algorithms
Behavioral finance theory in another word, prospect theory (Daniel Kahneman et all won Nobel Prize) claims that market behavior (decision making of buy-sell) is heavily incorporated with individual physiologic effect between returns and probability and then it can be modeled as a curve with a reference point. Figure 1 has the reference point in probability so the returns becomes flat after the point.

Cumulative prospect theory 

This is also by Kahneman. For the 2nd figure, buyers’ decision depends on prospect of probability/risk (individual feeling you might win or not) and return is not linear but discrete as shown.  The figure shows people seemed to over react for 2 extreme cases of probability but does not change reaction much for mid probabilities.

Tuesday, July 24, 2012

Open Yale Lecture 6

Efficient Markets vs. Excess Volatility


Efficient Markets:
Harry Roberts (1967)
Market price incorporated with:
Weak Form – info on past prices
Semi Strong – all public info
Strong – all info 

Random Walk Theory 

Random Walk Theory for Stock Market  - Karl Person
  Xt = Xt-1 + Et
  Et : Noise

  News (about values) appeared randomly so it creates fluctuation noise) --> stock price up/down as random walk

The First Order Auto-regressive Model 

y = a+bx+u

è Forecast of Stock Market 


First the class talked about what is efficient market. (Market is a price of something. For instance, stock price) There are some definition historically but one talked was by Harry Roberts (1967). The theory models the types of information and based on them, efficient market is classified to weak, semi strong, and strong. For example, "Strong efficiency" is depends on all information available. Normally stock market is semi-strong (means depending on public info) 

Next the class discussed prediction (of price behavior in the market) as a security. 2 algorithms (math formulas) such as Random walk and Auto regression, were introduced and these theories has been not  only applied for economics but also applied to predict any natural random phenomenon under study. However in my opinion, the application of these theory seemed to be difficult and as professor Shiller himself said, not many are succeeded. (If easy, too many rich people?) This was one of HW for Yale students and I thought it is really hard -_-);;

Monday, July 23, 2012

Open Yale Lecture 5



Insurance = A risk management device ßà security
Equity Premium Puzzle
Puscott + Mehra
(positive) 4% premium (US)
Selection Bias
Stock Market disruption                               Russia + China
Corporate profit tax, personal income tax
Dividends 90% WWII
Risk Pooling -à Independent  x: num of accidents n: policies p: prob of accidents
F(x) = binominal distribution
Mean(x/n) = p
Sigma(x/n) = Root{p(1-p)/n}
Normal Approximation
Bell shape curve
Probability theory
Insurance as Invention
Contract design
Risks and Exclusions (moral hazard and selection bias)
Mathematical model
Corporate or Mutual
Government regulation
Classifying of Insurance companies
Multiline / Mono-line
Property + casualty $1.4 Trillion
                Automobiles >> home owners
Life $4.9 Trillion 


The concept of insurance was invented as early in 17C. Now a day the concept became very important to secure one's family and properties, but its growth has been very slow. The problem was mainly in early history, insurance companies could not sell their products to the customers (especially life insurance was rejected, was thought bad luck? Did not sound right, etc.). So historically insurance companies’ efforts were 1) how to convince customers in nice way 2) how to prevent from canceling. Eventually they developed more attractive policies such as the insurance with cash values.