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Purpose: Bank tier categorization is determined by size, complexity, and regulatory requirements, with criteria varying by country and authority (CBK, 2020). Tier 3 banks are the smallest, providing basic services to individuals and small businesses (CBK, 2020). This study investigated the impact of Treasury bill investment on the financial performance of Tier 3 commercial banks in Kenya. Methodology: This study was grounded on the theory of Capital Asset Pricing. The study used secondary data from the Central Bank of Kenya and audited financial statements from 2015 to 2022. Focusing on Return on Assets, the findings aimed to help Tier 3 banks optimize financial performance. Findings: Results showed that investing in treasury bills significantly improved financial performance of tier three commercial banks. Unique Contribution to Theory, Practice and Policy: The study recommended that policy makers should come up with policies that favor allocating more investment capital towards Treasury bill investment so that banks may seize opportunities to optimize their investment strategies and consequently strengthen their overall financial performance in the market. [ABSTRACT FROM AUTHOR]

AbstractThe paper investigates aggregation bias by comparing the risk and returns characteristics of stock exchange-traded shares and Treasury bills (T’bills) in Ghana. The study uses end of period annualized data on T’bills and stocks returns, and inflation from 1990 to 2020. We mainly consider four separate investment periods: 1990–2000, 2001–2010, 2011–2020, and 1990–2020 (i.e. the aggregated period) in order to determine possible aggregation bias occurring from lumping the years together. We measure average annual returns, standard deviations, co-efficient of variations, Sharpe ratio, ANOVA, Jarque-Bera test, maximum drawdowns (MDD), and correlation analysis to determine risk and return characteristics of the two instruments. The study finds that T'bills compared to stocks shows higher returns yet lower risk, thereby indicating an inverted yield curve. Levene’s Test for Equality of Variances indicates stocks significantly outperformed T’bills over the 31-year aggregated period. The study reveals the presence of aggregation bias as stock and T’bill risk and return characteristics of two segregated periods (i.e. 1990–2000 and 2011–2020) contradict the general expectation of risk-return trade-off theory contrary to that of the aggregated period. The MDD, ANOVA results, Anova F-test and Welch F-test reveal aggregation bias for T’bills but not for stocks. We recommend future studies to ensure that analysis and conclusions made do not suffer aggregation bias by disaggregating aggregated units.

The paper investigates aggregation bias by comparing the risk and returns characteristics of stock exchange-traded shares and Treasury bills (T'bills) in Ghana. The study uses end of period annualized data on T'bills and stocks returns, and inflation from 1990 to 2020. We mainly consider four separate investment periods: 1990–2000, 2001–2010, 2011–2020, and 1990–2020 (i.e. the aggregated period) in order to determine possible aggregation bias occurring from lumping the years together. We measure average annual returns, standard deviations, co-efficient of variations, Sharpe ratio, ANOVA, Jarque-Bera test, maximum drawdowns (MDD), and correlation analysis to determine risk and return characteristics of the two instruments. The study finds that T'bills compared to stocks shows higher returns yet lower risk, thereby indicating an inverted yield curve. Levene's Test for Equality of Variances indicates stocks significantly outperformed T'bills over the 31-year aggregated period. The study reveals the presence of aggregation bias as stock and T'bill risk and return characteristics of two segregated periods (i.e. 1990–2000 and 2011–2020) contradict the general expectation of risk-return trade-off theory contrary to that of the aggregated period. The MDD, ANOVA results, Anova F-test and Welch F-test reveal aggregation bias for T'bills but not for stocks. We recommend future studies to ensure that analysis and conclusions made do not suffer aggregation bias by disaggregating aggregated units. Impact statement: The problem of aggregation bias is one of the neglected issues in most research in finance and economics. There is perceived reliability and generalizations provided by studies with larger sample sizes without recourse to changes in political and macroeconomic conditions that potentially impact investment performance. Hence, investment decisions and policies could be affected by misleading conclusions drawn from aggregated data. By segregating the aggregated periods into three separate decades, we show that risk and return characteristics (as measured by risk-return trade-off theory, co-efficient of variation, Sharpe ratio, maximum drawdowns, and likelihood of loss) of stocks and treasury bills differ among the segregated periods suggesting the presence of aggregation bias. The study potentially enhances the effectiveness of investment and policy decisions among investors. As investor value increases through prudent investment decisions, it would attract more investors, thereby improving the efficiency of the capital market and ensuring efficient allocation of (economic) resources through increased market participation and enhanced liquidity leading to economic activities and GDP growth. [ABSTRACT FROM AUTHOR]

Research background: Interest rate as a stimulus to savings has been discussed by many scholars while ancient scholars kicked against the collection of usury (interest). Developing countries like Nigeria may not be stimulated with the rate of interest because of its insignificant level, which is presently causing financial exclusion against the opponents of interest.

When the BOJ (Bank of Japan) adopted a "quantitative and qualitative easing policy," zero bound restriction existed. The notion of market practitioners that the BOJ would not adopt a "negative interest rate policy" caused less volatility in the TB (Treasury Bill) market in comparison with a regime of a "negative interest rate policy." After the BOJ decided to adopt a "negative interest rate policy," zero bound restriction was lifted, and market practitioners expected that the policy rate decided by the BOJ might be lowered. This expectation gave room for TB yields to fluctuate more than before, and caused more volatility in the TB market under the regime of a "negative interest rate policy" than under one of a "quantitative and qualitative easing policy." This is why the TB yield curve under a "negative interest rate policy" is driven by a single common trend with mutual causalities in all maturities. In other words, the normal transmission function of the TB yield curve is recovered by the introduction of a "negative interest rate policy." [ABSTRACT FROM AUTHOR]

We examine the relationship between the top five cryptos and the U.S. S&P500 index from January 2018 to December 2021. We use the novel General-to-specific Vector Autoregression (GETS VAR) and traditional Vector Autoregression (VAR) model to analyze the short- and long-run, cumulative impulse-response, and Granger causality test between S&P500 returns and the returns of Bitcoin, Ethereum, Ripple, Binance and Tether. Additionally, we used the Diebold and Yilmaz (DY) spillover index of variance decomposition to validate our findings. Evidence from the analysis suggests positive short- and long-run effects of historical S&P500 returns on Bitcoin, Ethereum, Ripple, and Tether returns––and negative short- and long-run effects of the historical returns of Bitcoin, Ethereum, Ripple, Binance, and Tether on S&P500 returns. Alternatively, evidence suggests a negative short- and long-run effect of historical S&P500 returns on Binance returns. The cumulative test of impulse-response indicates a shock in historical S&P500 returns stimulates a positive response from cryptocurrency returns while a shock in historical crypto returns triggers a negative response from S&P500 returns. Empirical evidence of bi-directional causality between S&P500 returns and crypto returns suggest the mutual coupling of these market. Although, S&P500 returns have high-intensity spillover effects on crypto returns than crypto returns have on S&P500. This contradicts the fundamental attribute of cryptocurrencies for hedging and diversification of assets to reduce risk exposure. Our findings demonstrate the need to monitor and implement appropriate regulatory policies in the crypto market to mitigate the potential risks of financial contagion.

This paper focuses on analyzing theoretically how an ordinary investor may shape his investment decision. Choosing from a multitude of assets may be a great challenge, especially for a person who is not savvy with financial investment, securities, or generally speaking, allocating money in order to gain profit. Well, discussing some basic investment alternatives like deposits, t-bills, or commodities, and suggesting a simplified method of investment analysis, can actually help any individual make learned decisions which lead to preserving or increasing the value of the net worth.

The results of monetary policy outcomes suggest that Nigeria does not often enjoy ideal conditions to adopting a monetary policy regime aimed primarily at stabilizing prices due to increasing internal debt resulting from sales of government securities. This has also push-up the volume of money supplied into her economy. This has made the economy particularly exposed to price and quantity-type external shocks, which renders price stabilization all the more complicated. This study examines the impact of open market operations and money supply on inflation rate in Nigeria within the period of 1981-2016. Using the vector error correction model approach, the result revealed that Treasury bill, government bonds, and money supply have positive and significant relationship with inflation rate in Nigeria. However, total value of money market instruments, income per capita and interest rate had negative and significant impact on inflation rate in Nigeria. The study concluded that open market operations while controlling the supply of money had significantly impacted on price stability in the long-run in the Nigerian economy. The study suggests that there is need for an increase use in the open market operations as a tool for achieving stability of price in the country. [ABSTRACT FROM AUTHOR]