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Hedge fund managers' risk-taking choices are determined by their compensation structure. Most existing studies focus on how the incentive fee and the high-water mark provision affect managers' risk-taking. We build a simple model to show that managers' risk-taking is negatively related to their...
Persistent link: https://www.econbiz.de/10012854772
The Italian version of this paper can be found at 'http://ssrn.com/abstract=2126578' http://ssrn.com/abstract=2126578.The assessment of investors' risk tolerance by investment firms is a crucial issue both for regulators and for the industry. The economic and psychological literature has...
Persistent link: https://www.econbiz.de/10013087794
Ackert and Deaves (2010) said that most people have tendency to being risk averse, but with appropriate amount of compensation, people may take more risk. Understanding those circumstances, this research trying to figure risk involved in a Mean-Variance Model. This model has taken consideration...
Persistent link: https://www.econbiz.de/10012928683
Persistent link: https://www.econbiz.de/10010503103
Using exogenous wealth shocks stemming from the collapse of the housing market, we show that managers who experience substantial losses in their home values subsequently reduce the risk in their delegated funds. The decline in fund risk comes through reductions in idiosyncratic risk and tracking...
Persistent link: https://www.econbiz.de/10012972613
Mutual fund risk-taking via active portfolio rebalancing varies both in the crosssection and over time. In this paper, I show that the same is true for funds' off- balance sheet risk-taking, even after controlling for on-balance sheet activities. For this purpose, I propose a novel measure of...
Persistent link: https://www.econbiz.de/10012622826
The investment fund sector has expanded dramatically since the crisis of 2008-2009. As the sector grows, so do the implications of its risk-taking for the wider financial system and real economy. This paper provides empirical evidence for the existence of wide- spread risk-taking incentives in...
Persistent link: https://www.econbiz.de/10013271218
The investment fund sector has expanded dramatically since the crisis of 2008-2009. As the sector grows, so do the implications of its risk-taking for the wider financial system and real economy. This paper provides empirical evidence for the existence of widespread risk-taking incentives in the...
Persistent link: https://www.econbiz.de/10012880721
The concept of enterprise risk management will be examined in the context of multi-strategy hedge funds and fund of hedge funds. This paper seeks to demonstrate that risk at these organizations has to be considered holistically and not in “silos”. A number of qualitative and quantitative...
Persistent link: https://www.econbiz.de/10013147255
We study financial risk taking via standard and sophisticated financial investments. Using survey data on 2,047 individuals, we find that standard investments are strongly associated with both actual and perceived financial literacy for men, but only with actual literacy for women. Sophisticated...
Persistent link: https://www.econbiz.de/10012969771