We examine whether and how measures of market and credit risk modeling identified from banks' financial reports enhance the returns-relevance of their estimated annual unrealized fair value gains and losses for financial instruments. To capture differences in market liquidity and fair valuation...

We examine trade-offs that Prosper, a large online peer-to-peer lending platform, has made over time in its lending processes. Since its 2006 inception, Prosper has (1) changed the way it sets the interest rates on loans from auctions among peer lenders to pre-set pricing based on a proprietary...

We use changes in aggregate product market output as instruments for changes in the business fundamentals of the firms operating in those markets. These output changes are remote from individual firms’ economic and accounting choices while still capturing key fluctuations in their relevant...

We examine the relative timeliness with which asset write-downs incorporate adverse macroeconomic outcomes versus adverse firm-specific outcomes. We posit that, compared to adverse macroeconomic outcomes, adverse firm-specific outcomes exhibit high information asymmetry between firm managers and...

We hypothesize and provide evidence that convexity in the returns-earnings relation results in significant part from firms' real continuation options, i.e., their discretionary ability to continue operations, to make new investments, and to raise capital when financing deficits arise. We...

Complementing prior literature that examines determinants of the sensitivity of returns to losses, we provide evidence that the sensitivity of returns to gains increases with firms' real continuation call options, i.e., their discretionary ability to continue operations, to make new investments,...

We hypothesize and provide evidence that accounting conservatism and complementary accounting-based debt covenants increase expected recovery rates by preserving the firm's fungible economic assets at levels sufficient to support recovery by debtholders. We employ Das & Hanouna's (2009) approach...