Alexander David and Amel Farhat ♦ We provide robust evidence that the price of analysts’ disagreement risk in the cross-section of stock returns changes sign; it’s positive (negative) in periods of high (low) disagreement. We construct a general equilibrium model in…
Qianqian Huang, Feng Jiang, Yuhai Xuan, and Tao Yuan ♦ We examine how banks respond to natural disasters when borrowers are in proximity to affected areas. We find robust evidence that banks impose significantly higher loan spreads on firms in…
John Chalmers and Arash Dayani ♦ We document two mutual fund strategies: “Swinging for the Fences” (SF), where managers hold stocks with extreme style-adjusted returns on either tail of the return distribution, and “Batting for Average” (BA), where managers seek stocks…
Alexander Michaelides, Joachim Inkmann, and Yuxin Zhang ♦ Using a calibrated, collective life-cycle portfolio choice model for a dual-income couple, we show that an increase in the ability to share risk within the household due to a mean-preserving spread in…
Zhaoxia Xu, Viral V. Acharya, and Soku Byoun ♦ We show that with a time-varying cost of capital (COC), firms save from external capital when the firm-specific COC is low to hedge against future underinvestment risks associated with a higher…
Fariborz Moshirian, Peter Pham, and Jenny Jihyun Tak ♦ Using US mutual funds’ international voting records, we investigate whether proximity to firm operations promotes active monitoring by foreign investors. To identify monitoring effects, we exploit variations in proximity arising from…
