Area: Finance
Mortgage Prepayments: Factors beyond Interest Rate Movements
A model estimates the impact of economic variables on the pricing of prepayment risk
Calculating a Value for the Government Support Banks Enjoy
Researchers’ model could quantify the risks in the growing movement to ease up on Dodd-Frank regulations
Lending to Startups: Not as Risky as You’d Think
Entrepreneurs borrow between equity funding rounds with a strong record of repaying debts
Chinese Investors Learn about Derivatives the Hard Way
An analysis of warrant trading reveals individuals’ poor grasp of complex securities
How an Excess of Stock Analyst Optimism Lands on Companies Least Deserving of It
Results of financially weak firms are difficult to forecast; in uncertainty, Wall Street’s views are overly generous
Taking the Battle for Financial Literacy to Where the Eyeballs Are
Research by Bruce Carlin and Stephen Spiller suggests YouTube videos could help consumers make better money decisions
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
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
How Life Insurers Insulate the Markets from Turmoil
Valentin Haddad’s research finds that insurers’ patient investing shields risky assets — and those who hold them — from steeper declines
Quantitative Easing Kept the Foreclosure Crisis from Being Even Worse
The Fed’s gambit didn’t trigger a home-price recovery, but research shows it reduced subprime foreclosure risk
Could Costly Housing Bring Down Superstar Cities?
Stuart Gabriel’s research shows how a vibrant economic hub loses essential residents
Ignorance — About One’s Investments, Anyway — Isn’t Always Bliss
Valentin Haddad’s research looks at the phenomenon of “information aversion,” when individual investors stop tracking their portfolios for fear of bad news
With Bonds, the Past Can Be Prologue
Patterns in corporate bond returns include abrupt short-term performance reversals and “momentum” waves that persist
How ETFs Muffle Stock Market Feedback to Managers
The rise of passive investing leaves companies mistrusting market signals on how best to deploy capital
Momentum Investing: It Works, But Why?
After a quarter century of sprawling study, it’s time to narrow the focus and settle on an explanation
Behind the Annuity Conundrum: The Belief They’re Unfair
Researchers find little commonality among haters of the difficult-to-sell retirement products, except when discussing fairness