This paper examines the question: Does regulatory approval of prospectuses act as a “certification” of securities offerings? Rational investors should generally ignore prospectus approval due to its being uninformative regarding either the quality of, or motives for, the underlying offering....

Individual investors use advertisements to make investment decisions. We test how advertising content affects investor's knowledgeability and evaluation of an equity offering. The results show that persuasive content (e.g. images) increases investor knowledgeability about fundamental...

We use an incentivized survey experiment to test how visualizing key information of mutual funds helps investors to follow the minimum-cost investment strategy. Respondents can invest in three ETFs tracking the same index and we find that adding a net expected return graph reduces the amount of...

We examine the profitability of implementing a short term trading strategy based on predicting the error in analysts' earnings per share forecasts using publicly available information. Since large earnings surprises may lead to extreme values in the forecast error series that disrupt their...

Standard factor models imply a linear relationship between expected returns on assets and their factor exposures. We provide the asymptotic properties of factor-model-based expected return estimators for individual assets and show that exploiting this linear relationship leads to precision gains...