Repurchase agreements are critical financing tools that lubricate the financial system. They have been complicit in financial crises, yet they may hold the key to post-recession “normalization.” Despite their importance in practice, they are all but ignored in the traditional undergraduate...

Dutch Auction Rate Preferred Stock (DARPS) was created in the 1980s as a way for fully taxable corporate investors and tax-exempt issuers to share the tax benefits of the dividends received deduction. DARPS dividend yields were reset every few weeks through an auction, minimizing price risk and...

As institutional investors have become more aggressive in deploying their capital, fund managers have become more creative with their product offerings. In this paper, we consider a new institutional fund of mutual funds, a portfolio that combines the best-idea stocks from two underlying primary...

Undergraduate investments and portfolio management courses have traditionally prescribed the optimal choices for rational economic man—a creature who does not exist. Real portfolio choices, especially those by retail investors, are made by “normal” people, and normal people exhibit...

In February of 2008, the $330 billion auction-rate security market began to fall apart. Brokerage houses that managed the periodic auctions refused to support their issues, so that auctions failed and liquidity disappeared. Investors had a wake-up call: an asset they had thought was a...

Many consumer advocates consider payday loans—short-term, uncollateralized loans with high interest rates—to be predatory. The demand for short-term funding has spurred the quest for a substitute, an effort encouraged and supported by regulators like the Federal Deposit Insurance...