Purpose: This paper examines the extent to which noise demand and limits of arbitrage affect the pricing of acquirer stocks both at the announcement period and over the longer horizon. Design/methodology/approach: An event study approach was adopted to measure announcement-period cumulative...

Purpose The purpose of this paper is to explore trading strategies that exploit investors’ anchoring bias. Design/methodology/approach This paper forms portfolios based on nearness ratio and other anomaly variables under one- and two-way sorts. The portfolio return series are then regressed on...