<Para ID="Par3">The tournament hypothesis of Brown et al. (J Finance 51(1):85–110, <CitationRef CitationID="CR7">1996</CitationRef>) posits that managers of poorly performing funds actively increase portfolio risk in the second half of the year. At the same time, it is a well-established fact that stock returns and the subsequent return standard...</citationref></para>

<Para ID="Par3">The tournament hypothesis of Brown et al. (J Financ 51(1):85–110, <CitationRef CitationID="CR2">1996</CitationRef>) conjectures that mutual funds with a below-average performance over the first half of the year tend to increase their risk in the second half of the year. Schwarz (Rev Financ Stud 25(3):913–936, <CitationRef CitationID="CR14">2012</CitationRef>) argues that the...</citationref></citationref></para>