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Area: Finance

Illustration of two dice Research Brief / Investing

You Call That Fun? Why Individual Stock Investors Bother

Avanidhar Subrahmanyam studies how some investors’ gambling mentality affects share prices

Street sign with Past, Present, Future and collage of bond certificates Research Brief / Bond Market

With Bonds, the Past Can Be Prologue

Patterns in corporate bond returns include abrupt short-term performance reversals and “momentum” waves that persist

Aerial view of two bridges over water with a dinghy passing underneath Research Brief / Investing

Why Risk and Reward Don’t Always Move in Concert

Investors initially underreact to volatility, then overreact

Monochrome picture of children cheering Research Brief / Investing

When Younger Investors Overreact to News, Others Feel It

Inexperienced investors, lacking historical context, impact markets

An angled shot of the U.S. Federal Reserve building Research Brief / Banking

When the Fed Taps the Brakes, Not All Banks Slow Down

Some lenders’ balance sheets are less affected by a rising federal funds rate

A laptop computer Research Brief / Housing

When Homeowners Confide in Google, Forecasters See Clues to Mortgage Defaults

Researchers developed an index that warns earlier than others about approaching home loan problems

Lehman Brothers building on September 15 Research Brief / Investing

When Financial Intermediaries Sneeze, These Assets Catch a Cold

Some investment vehicles are more reliant than others on the health of trading firms

Monochrome photo of people standing in line for bread Research Brief / Banking

What Makes a True Financial Crisis?

Data back to 1870 show similarities in the worst banking system shocks — focusing on loose lending before a meltdown

Bar and line chart Research Brief / Corporate Finance

What Drives LBO Fever? More Than Just Cheap Loans

Private equity investors weigh the total cost of capital — not just debt, but equity as well — when pursuing buyouts

Person pulling out 5 dollar bill from white envelope Feature / Behavioral Decision Making

Unwelcome Gift Message: ‘I Know You Need Money’

The same gift, with a message on saving the recipient time, is more welcome

Research Brief / Investing

Treasury Securities Are Actually Cheap Sometimes

They don’t trade at an absolute equal to intrinsic value, despite their image as the world’s investment bedrock

Monochrome photo of Wall Street Research Brief / Investing

To Wall Street, There’s No Crisis Like a Banking Crisis

Tyler Muir finds that neither war nor deep recession darkens investor sentiment like sudden turmoil in the financial system

Illustration balance of risk and reward on a scale Research Brief / Stock Returns

The Strange Case of the Missing Stock Market Return

Investors in leveraged companies take on extra risk, but research indicates they see no offsetting return

Row boat stranded on the beach at low tied Research Brief / Economy

The Relative Well-Being of Generations: An Explanation for Falling Interest Rates?

Doing worse than mom and dad is a drag on the entire economy

A castle with a moat Research Brief / Investing

The Moat That Keeps Complex Asset Strategies Profitable

Andrea Eisfeldt finds that hedge funds with infrastructure to execute sophisticated arbitrage crowd out less-expert investors

Bird's eye view of a suburb Research Brief / Housing

The Housing Meltdown Would Have Been Far Worse Without California’s Anti-Foreclosure Laws

Restraining lenders saved hundreds of billions in home value