John J. Hatem is a professor of finance at Georgia Southern University. He requests that his students: Ask questions, read with comprehension, think, use their imagination, practice, and maintain their integrity. He affirms the importance of an educated and independent-minded citizenry for the proper functioning of American society.
Areas of Expertise (4)
Best Paper Award
2008 Academy of Financial Services
Louisiana State University: Ph.D., Finance 1990
Yale University: B.S., Molecular Biophysics and Biochemistry 1980
- American Association of Individual Investors
Teaching MIRR to Improve Comprehension of Investment Performance Evaluation Techniques: A CommentJournal of Economics and Finance Education
Hatem, John J., Ken Johnston, and Bill Z. Yang
2013 Balyeat, et. al. (2013, this journal) suggest that IRR does not have a clear economic interpretation and that MIRR highlights the reinvestment assumptions of NPV and IRR thus increasing its value as a teaching tool. This comment addresses misconceptions found in the work of Balyeat, et. al. In particular, it reiterates the economic interpretation of IRR and reexamines the alleged reinvestment rate assumptions.
Yield-to-Maturity and the Reinvestment of Coupon Payments: ReplyJournal of Economics and Finance Education
Forbes, Shawn M., John J. Hatem, and Chris Paul
2009 Our original note addressed a common misconception that to earn the yield-to-maturity (YTM) on a coupon bond an investor must reinvest the coupon payments. Shirvani and Wilbratte (2009) take issue with our presentation and results. We will demonstrate that their arguments entirety rest on the proposition that the YTM must equal the realized compounded yield (RCY). This is a construct that explicitly assumes coupon reinvestment. We made no claim in our original presentation with regard to their proposition, because it is not required to calculate the YTM. Furthermore, we will discuss their claims with regard to the “economic significance” of the yield to maturity measure.
Yield-to-Maturity and the Reinvestment of Coupon PaymentsJournal of Economics and Finance Education
Shawn M. Forbes, John J. Hatem, and Chris Paul
2008 This note addresses a common misconception, found in investment texts and popular investment education literature, that in order to earn the yield to maturity on a coupon bond an investor must reinvest the coupon payments. We identify a sample of text and professional sources making this claim, demonstrate that yield to maturity entails no assumption of coupon reinvestment, discuss a cause for this confusion and offer a possible remedy.