Risks For the Long Run: A Potential Resolution of Asset Pricing Puzzles
That the volatility of the equity risk premium and the risk-free rate are larger than most models predict has long been known and discussed (for example the seminal Mehra and Prescott 1985 paper). Bansal and Yahon try their hands at explaining why this puzzle exists (their paper will appear in an upcoming Journal of Finance (JF)). They model the “consumption and dividend … [ Read more ]
Content: Article | Authors: Amir Yaron, Ravi Bansal | Source: Journal of Finace (JF) | Subjects: Finance, Industry Specific | Industry: Investment Banking
Can the Market Add and Subtract? Mispriced Stocks Break the Rules of Efficient Markets
According to the law of one price, identical assets should have identical prices. Driving this law is arbitrage, in which an investor buys and sells the same security for two different prices to make a profit. In a well functioning capital market, arbitrage prevents the law of one price from being broken, and in fact, violations of the law are rarely seen.
Content: Article | Authors: Owen A. Lamont, Richard H. Thaler | Source: Capital Ideas | Subjects: Finance, Industry Specific | Industry: Investment Banking
Compromising Positions
Will credit derivatives encourage more lending, or will they harm the interests of borrowers?
Content: Article | Author: Hilary Rosenberg | Source: CFO Publishing | Subjects: Finance, Industry Specific | Industry: Finance / Banking
Growth Continues for Online Ad Spending in 2003
Consulting Market
U.S. Sake Market
Gigabit Ethernet Market
LCD Monitor Market
The Price Response to S&P 500 Index Additions and Deletions: Evidence of Asymmetry and a New Explanation (.pdf)
Chen, Noronha, and Singal report in a forthcoming JF article that when stocks are dropped from the S&P 500, there is a temporary price decline. However when firms are added, the increase is seemingly permanent. This asymmetry is seemingly counter to most widely held views that demand curves for individual stocks are elastic. The authors suggest that this asymmetry is due to … [ Read more ]
Content: Article | Authors: Gregory Noronha, Honghui Chen, Vijay Singal | Source: Journal of Finace (JF) | Subjects: Finance, Industry Specific | Industry: Investment Banking
Excessive Data Creates Digital Packrats
Mobiles Outnumber Fixed-Line Phones
Camera Phone Market
The Real Economics of Offshoring
Viruses, IT Market, and Internet Population – China
Web Conferencing Market
US Mobile Market Update
Wireless Gaining Subscribers Worldwide
Good to Rate
The rating agencies are under review for their failure to downgrade Enron more promptly. The only trouble is, proposed reforms might make things worse.
See related NYU STERNbusiness article by Lawrence J. White, “The Bond-Rating Game” at:
Content: Article | Author: Tim Reason | Source: CFO Publishing | Subjects: Finance, Industry Specific | Industry: Finance / Banking
Cosmetic Medical Procedures in the U.S.
Brunswick Integrates Code Expertise
SEC is an early adopter of sports-gear maker’s open-source integration engine.
Editor’s Note: a topical story but for those with E-business responsibilities, the open-source program referenced might be worth investigating, so I included it.
Content: Article | Author: Charles Babcock | Source: InformationWeek | Subjects: Industry Specific, IT / Technology / E-Business | Industry: Information Technology