Banks are often accused to bias their information documents in order to exploit less sophisticated investors. This paper analyzes the sales prospectus scenarios created by banks to demonstrate their structured financial products for retail investors. Based on a broad data-set of prospectuses in...

Previous studies refer to individual investors as "dumb noise traders." We question this undifferentiated verdict by conducting an analysis of the cognitive competence of individual investors as assessed by experts. We let experts (researchers as well as experienced practitioners) assess the...

We develop a model for the demand of warrants by individual investors with regard to their sensitivity to issuer margins, defined as the relative overpricing with respect to the theoretical value. Based on an empirical data set we show that investors are relatively margin-sensitive; that is,...