Corporate investment decisions require managers to forecast expected future cash flows from potential investments. Although these forecasts are a critical component of successful investing, they are not directly observable by external stakeholders. In this study, we investigate whether the...

We develop a model to explain the value and consequences of investment screens, which are commonly employed by sophisticated investors. In the model, some stock-market investors are uncertain about the quality of private information before they acquire it and, in equilibrium, rationally use...