Through a sweeping study of the world's major financial markets, this paper divides the financial speculative prices into three distinctive models, viz. free speculative price, compound price and arbitrary speculative prices. An attempt is then made to probe the inter-relationship and function...

This study investigates market reactions to announcements of CEO turnover and finds that forced turnovers are not accompanied by positive returns, which contradicts the broad view that firing a CEO sends a positive signal to the market. This contradiction is further explored by focusing on the...

Stock market anomalies representing the predictability of cross-sectional stock returns are one of most controversial topics in financial economic research. This chapter reviews several well-documented and pervasive anomalies in the literature, including investment-related anomalies, value...

Asset allocation models have evolved in complexity with the development of modern portfolio theory, but they continue to operate under the assumption of investor rationality and other assumptions that do not hold in the real world. For this reason, academics and industry professionals make...

This chapter examines the phenomenon of frequent stock trading. Specifically, it covers the ample research demonstrating the negative effects of frequent trading on investor returns, as well as several possible underlying causes for this irrational behavior. Possible causes of frequent trading...

“Investor Behavior: An Overview” is the introduction chapter for the book Investor Behavior: The Psychology of Financial Planning and Investing edited by H. Kent Baker and Victor Ricciardi that presents a historical perspective of investor psychology and theory. The field of investor...

This paper examines whether shareholder litigation contributes to the decline in U.S. stock market listings. We find that higher litigation risk induces firms to delist. We establish causality by exploiting a 1999 decision by the Ninth Circuit Court that reduced litigation risk. The effect is at...

We compare actual R&D spend with the managerial rhetoric around technology and innovation contained within corporate disclosures of US-listed firms. We find that, whilst actual R&D spend and patents do not entice institutional investors to increase their stock holdings, firms that espouse...

When there is uncertainty about a CEO's quality, news about the firm causes rational investors to update their expectation of the firm's value for two reasons: Updates occur because of the direct effect of the news, and also because news leads investors to update their assessment of the CEO's...

On theoretical grounds, monitoring of top executives by the (supervisory) board is expected to be value relevant. The empirical evidence is ambiguous and we analyze three non-competing explanations for this ambiguity: (i) The positive effect on firm value of board monitoring is hidden in stock...