A number of well-known practitioners such as Warren Buffett and Jeremy Siegel have long advocated a strategic asset allocation in which investors hold a majority of their assets in equities. However, in this simple straightforward study we find that in order to maximize the well-known Sharpe...

We analyze the determinants and effects of credit default swap (CDS) trading initiation on sovereign bonds. For high default risk countries, CDS initiation provides significant price efficiency benefits in the underlying market. CDS initiation also reduces average risk premiums, with reductions...

In this paper we examine the link between income inequality and financial overconfidence. Using data from the FINRA Foundation’s National Financial Capability Study we measure respondents’ self-perceived and actual investment knowledge and thus identify overconfident individuals. We also...