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Risk-Free versus Risky Assets : Teaching a Portfolio Model With Application to the Stock Market

Berga, Dolors - 2019

In this paper we present an application where advanced undergraduate students can solve the expected utility portfolio model with a risk-free and a risky asset with both up and down returns in the Stock Market. With real Stock Market data, we use Excel Solver to find the portfolio decision and...

Persistent link: https://www.econbiz.de/10012860660

Hispanic Culture, Portfolio Decisions, and Asset Prices

Addoum, Jawad M. - 2020

We examine the impact of culture on portfolio decisions and asset returns, focusing on the large and growing Hispanic population in the United States. We find that both retail and institutional investors in high Hispanic neighborhoods overweight local, lottery-type, and high-momentum stocks and...

Persistent link: https://www.econbiz.de/10012854853

Asset Pricing with Index Investing

Chabakauri, Georgy - 2020

We theoretically analyze how index investing affects financial markets using a dynamic exchange economy with heterogeneous investors and two Lucas trees. We identify two effects of indexing: lockstep trading of stocks increases market volatility and stock return correlations but reduction in...

Persistent link: https://www.econbiz.de/10012856425

Behavioral Finance - Asset Prices Predictability, Equity Premium Puzzle, Volatility Puzzle : The Rational Finance Approach

Rachev, Svetlozar T. - 2020

In this paper we address three main objections of behavioral finance to the theory of rational finance, considered as … “anomalies” the theory of rational finance cannot explain: (i) Predictability of asset returns; (ii) The Equity Premium; (iii … are the only possible explanations of the “anomalies”, but offer statistical models within the rational theory of finance …

Persistent link: https://www.econbiz.de/10012842392