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Actively managed mutual funds have distinct return distributions from their passive benchmarks and our theoretical analysis using tail-sensitive risk preferences suggests that active value and growth funds may serve to reduce downside risk and capture upside potential, respectively. Furthermore,...
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We study whether analysts' recommendations and the market's reactions to recommendation changes are influenced by the structure of analysts' research portfolios. We find that analysts maintain more positive recommendations for stocks that belong to the “core industry” in their research...
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