The following hypotheses are proposed to focus the research:
Ho: There is no relation between investors' level of knowledge of derivatives hedging and their perceptions of asset managers' strategies.
H1: Investors with high levels of knowledge of derivatives hedging perceive their asset managers' strategies more positively than do investors with lower levels of knowledge about derivatives hedging.
Ho: There is no relation between variation in managerial disclosure parameters and the reactions of investors to earnings surprises.
H1 Increases in the frequency or duration of managerial disclosure parameters are associated with greater levels of acceptance and positive perception of earnings surprises by investors.
Methodology
Data Collection
In order to gather information about how research participants perceive derivatives hedging, the sample population will be asked to respond to a survey. Both active and non-active users of derivatives will respond to a semi-structured questionnaire. The questionnaire items will be designed to measure the aspects of investing that affect the use of derivatives. The use of semi-structured question items will enable the respondents to provide additional detail or explanation when answering open-ended questions.
A brief pilot of the questionnaire will be conducted by requesting a group of university students majoring in business finance and a group of university students majoring in the arts and humanities to complete the survey. The pilot study will focus on obtaining feedback related to the content validity of the questionnaire. In addition, the pilot test will assess whether the questions are worded in a way that encourages the study participants to be honest and forthcoming in their responses.
The questions will be grouped in the following categories: 1) Perception, 2) Expertise, 3) Value, and 4) Transparency (managerial disclosure). The options that define the level of agreement respondents have with the questionnaire items will be indicated according to a 5-point Likert scale. The scale will use the number "1" to indicate total disagreement with items and the number "5" to indicate total agreement.
Data Analysis
The independent variables will be: Knowledge of the respondent about risk and return and derivatives investing in complex situations; benefits that can result from using derivatives investment strategies, managerial disclosure that exceeds the SFAS 133 hedge accounting requirements, and earnings surprises as measured by perceptions about financial loses that are a result...
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