New Evidence of Asset Mispricing of Closed-End Fund Discount by Using a Finance Paradigm Based on the Greek Orthodox Religion

Several theories attempt to make sense of the closed-end funds discounts within a rational framework such as those by Malkiel(1977,1995), Barclay, Holderness and Pontiff (1993), Kumar and Nornoha (1992), Pontiff (1996), Chen, Kan and Miller (1993), Chopra, lee, Shleifer and Thaler (1993), Leonard and Shull (1996), Brauer (1993) and Swaminathan (1996). Mathematical explanation of noise trading from a behavioural Orthodox approach is a complete new subject of research. My model tries to calibrate noise in terms of systematic errors and biases formed by noise traders, as they ignore the religious factors that affect their thoughts and therefore their investment decisions. The model will show the Orthodox theory by using statistical techniques in terms of probability modelling and measures of locations and dispersions. Irrational investors trade on wrong believes that was created from inability to manipulate their thoughts according to the Orthodox approach. This model is used to show mathematical equilibrium by focusing only on noise traders that creates deviations from rationality. The mathematical model will calibrate the variables used from the Orthodox religion namely prayer, fast, prostrations, vigil, almsgiving and rejection of personal will to manipulate and balance thoughts in order that to achieve spiritual and financial equilibrium