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With its standards FAS 141 and 142 the Financial Accounting Standard Board has revo-lutionized the accounting for business combinations. One of the major changes is theabolishment of goodwill-amortization, which has been replaced by an annual impairmenttest at the level of a reporting unit....
Persistent link: https://www.econbiz.de/10005858511
Analysts providing more accurate earnings forecasts also issue moreprofitable recommendations. We demonstrate how investors can profit fromthis contemporaneous link by differentiating between “able” and “lucky”analysts. In line with previous studies, we find that past track records...
Persistent link: https://www.econbiz.de/10009302619
We analyse daily lead-lag patterns in US equity and credit default swap (CDS) returns. We first document that equity returns robustly lead CDS returns. However, we find that the CDS-lag is due to common (and not firm-specific) news and arises predominantly in response to positive (instead of...
Persistent link: https://www.econbiz.de/10010326281
This paper presents a Heterogeneous Agent Model of a financial market with chartist and fundamentalist traders that exhibit bounded rationality and short-term thinking to explain the effect of under and overreaction to news. The existence of the Market Maker's finite price adjustment speed leads...
Persistent link: https://www.econbiz.de/10010323743
This paper examines the role of sophisticated investors in pricing future earnings. Using the future earnings response coefficient (FERC) model recently developed by Ettredge et al. (2005), we test the effect of analyst following and institutional ownership on the informativeness of stock...
Persistent link: https://www.econbiz.de/10014050494
This paper extends the study of Herrmann and Thomas (2005) on granularity in analyst forecasts at multiples of nickels and finds that forecasts at multiples of nickels are more optimistic, and induce weaker market responses. Granularity in analyst forecasts combined with managers’ incentive to...
Persistent link: https://www.econbiz.de/10014205618
In this paper I examine the relation between profits from book-to-market strategies and momentum strategies. Specifically, I test two time-series hypotheses which are not mutually exclusive, but do have opposite predictions for subsequent momentum profits. First, if periods of large...
Persistent link: https://www.econbiz.de/10014218958
We use trend-following, trend continuation and trend reversal pattern recognition techniques to apply technical charting rules to trading seven major currency pairs for the period of 1999 through early 2007. Our results suggest that the persistent popularity of technical analysis among...
Persistent link: https://www.econbiz.de/10014219672
While a large literature has examined analysts’ earnings forecasts or stock recommendations in isolation, there is little research on the effectiveness with which analysts translate their earnings forecasts into recommendations (referred to as translational effectiveness). This study provides...
Persistent link: https://www.econbiz.de/10014224426
In this study, we examine how analysts are affected by the public actions of investors and other analysts by closely examining how analysts revise their earnings forecasts after an earnings announcement. In particular, we hypothesize that analysts observe the actions of investors and other...
Persistent link: https://www.econbiz.de/10014224917