"We show that abnormal returns to analysts' recommendations stem from both the ratings levels assigned and the changes in those ratings. Conditional on the ratings change, buy and strong buy recommendations have greater returns than do holds, sells, and strong sells. Conditional on the ratings...

Asset pricing models generate predictions relating assets’ expected rates of return and their risk attributes. Most tests of these models have employed realized rates of return as a proxy for expected return. We use analysts’ expected rates of return to examine the relation between these...

Exchangeable debt gives the purchaser the option to exchange the debt for stock of a second company, referred to as the "convert" firm. For example, in March of 1985, Petrie Stores issued $150 million of exchangeable callable debt, due in 2010. The exchange feature enabled the purchaser of the...