This paper analyzes the risk-taking behavior of financial intuitions that have guarantees and/or institutions that find it beneficial to develop a reputation for not taking risk. It focuses on two questions: Is it rational for them to take on less risk than they can get away with, and if it is...

The paper examines the risk-and-return characteristics of a popular development strategy, the presale system (or sale before completion), used in many Asian cities. We model a presale decision in a real-options framework and suggest that the use of presale is primarily for a risk-sharing...

This paper examines herding behavior among Hong Kong investors using announcements of the opening of new casinos in Macau. The results show that there is a difference in the herding behavior toward these “Macau concept” stocks before and after the change in investment sentiment regarding...

This paper expands on the existing literature on information asymmetry by testing if herding exists. We test herd behavior in a transparent and order-driven market using intraday data. We propose (1) a modification in the herding measure, (2) that investors tend to herd more based on fundamental...

The right of lenders to request for top-ups of negative equity when the property value falls below the loan outstanding is a little known, yet widely adopted provision in mortgage documents in many Asian markets. We analyze the effect of the top-up option by appealing to a contingent claim...

This study updates the issue of arbitrage and joint market efficiency of the Hong Kong derivatives markets from three aspects: (1) put-call-futures parity is tested on a much more recent and larger data set (2002-2004); (2) the period covers several major events that exert remarkable shocks to...

type="main" <p>This article models the riskiness of structured securitization deals. The deals are put together by “banks,” which can exercise strategic options over the risk put into the deals. The banks face a trade-off between the benefits of risk-taking now and future franchise benefits if...</p>