We use data on the country allocations of investors from several countries to test the hypothesis of Dahlquist et al. (2003). Our results show that the country allocation in the international portfolio of these investors do not seem to be influenced by the choice between the world market...

In this paper the pricing of currency options in a target zone model is discussed. The movement of the currency index is a product of the movement within the target zone and jumps in the target zone itself in the form of re- or devaluations. The probability of a re- or devaluation is modelled as...

Owners of firms in trouble are more exposed to moral hazard problems than owners of successful firms. Foreign owners who face higher costs to monitor the firm should be more vulnerable to these problems than domestic ones. Consequently, a downward revision in a firm's expected future earnings...

This article discusses problems with proposed methods to estimate firm specific marginal q-ratios, where marginal q measures the value impact of new investment. The article concludes that suggested methods are likely to produce biased estimates since they fail to separate fluctuations in the...