An important determinant of belief polarization is the different interpretations of the same information. We examine whether discourse uncertainty in corporate disclosures, an important driver of differential interpretations, leads to polarization in financial markets. Using a novel measure of...

This paper investigates the motive of option trading. We show that option trading is mostly driven by differences of opinion, a finding different from the current literature that attempts to attribute option trading to information asymmetry. Our conclusion is based on three pieces of empirical...

The article presents an overview of the assumptions and unintended consequences of the widespread adoption of modern portfolio theory (MPT) in the context of the growth of large institutional investors. We examine the many so-called risk management practices and financial products that have been...

In this paper we investigate the negative relationship between analysts' coverage and stocks idiosyncratic volatility. While prior research argues that analysts cause the low level of idiosyncratic risk because they lack access to firm-specific information we hypothesize that the causal relation...

We examine the influence of investor conferences on firms' stock liquidity. We find that firms participating in conferences experience a 1.4% to 2.8% increase in stock liquidity compared to non-conference firms. Consistent with investor conferences improving firm visibility, the increase in...

In this paper we investigate the endogeneity of analysts' coverage decision. Specifically we argue that due to reputational concerns analysts avoid covering stocks with high levels of specific risk. Using three novel quasi-natural experiments we show that analysts' coverage drops after an...

In this research I empirically study the effects of information acquisition by investors or traders on analysts' forecast bias. Based on the theoretical literature on sell-side analysts, I argue that forecast bias is correlated to investors' information gathering, in two opposite directions. On...

We develop a dynamic adverse selection model where a career-concerned buy-side analyst advises a fund manager about investment decisions. The analyst's ability is privately known, as is any information she learns over time. The manager wants to elicit information to maximize fund performance...

The purpose of this paper is to make a quantitative and qualitative critical analyse regarding the three important aspects of stock market evolution. First, the forecasting problems are presented and analyse in order to establish the main problems and the potential solutions. Second, the...

Accurate Value at Risk (VaR) estimations are crucial for the robustness and stability of a financial system. Even though significant advances have been made in the field of risk modelling, many crises have emerged during the same period, and an explanation for this is that the advanced models...