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Persistent link: https://www.econbiz.de/10010410775
We derive equilibrium asset prices when fund managers deviate from benchmark indices to exploit noise-trader induced distortions but fund investors constrain these deviations. Because constraints force managers to buy assets that they underweight when these assets appreciate, overvalued assets...
Persistent link: https://www.econbiz.de/10012904735
We derive equilibrium asset prices when fund managers deviate from benchmark indices to exploit noise-trader induced distortions but fund investors constrain these deviations. Because constraints force managers to buy assets that they underweight when these assets appreciate, overvalued assets...
Persistent link: https://www.econbiz.de/10013047402
, investors make managers' fees more sensitive to performance and benchmark performance against a market index. This makes … overvalued assets. Socially optimal contracts provide steeper performance incentives and cause larger pricing distortions than …
Persistent link: https://www.econbiz.de/10012458188
Persistent link: https://www.econbiz.de/10013548065