The bedrock of financial economics is that there should be a tradeoff between risk and reward: an investment with low risk should have a low expected return, while one that could make you rich should also be one which could lose you a lot of money. A lot of research in finance is focused on...

Diversification practices by banks affect their own risk of failing and the risk of the banking system as a whole (systemic risk). A seminal theoretical work has shown that linear diversification can reduce the risk of a bank failing, but at the cost of increasing systemic risk. Later, a...

Creating favorable conditions for the development of industry is one of the key tasks with an increased level of complexity, the solution of which is associated with attracting investments and forming an investment policy that takes into account various specific characteristics of its...

Shari’a governance is considered a crucial element of the Islamic banking industry. As recent as 2017, Islamic banks in the Kingdom of Bahrain were required by the regulator to have only a Shari’a Supervisory Board and an internal Shari’a function. In 2017, the Central Bank of Bahrain...

This study arrives at a unifying risk measure for each of risk aversion and risk seeking preferences, a unifying risk measure (UrM) which explicitly embeds relative valuation of any two assets. The formal theory shows the UrM is, in relation to either of conditional volatility (CoV) or...

The aim of this work is to analyze the so-called "Low Risk Effect" and the evolution of the risk-reward relationship in time. Perhaps one of the milestones of the whole modern finance has been the investigation and the debate about the positive relationship between risk and reward in asset...

We examine in this paper a critical question in finance: the use of large nonlinear over-parametrized models or simpler models to forecast financial time series and the balance between underfitting and overfitting, the bias-variance trade-off, and the absolute performance in the test set. The...

Investors typically measure an asset’s potential to diversify a portfolio by its correlations with the portfolio’s other assets, but correlation is useful only if it provides a good estimate of how an asset’s returns co-occur cumulatively with the other asset returns over the investor’s...

In this paper, we will discuss how to get papers published in reputable journals. We will discuss this topic based on my experience. Thus, we will discuss how to get papers published in reputable journals in the areas of Economics, Finance, and Business based on our experience. We first discuss...

In this paper, we will discuss how to write a paper to get good publication in Economics and Business based on our experience. We first discuss the theories in Economics and Business we have been developing including the cost of capital, investors' behavioral models by using the cost of capital...