Topic: Risk Management
Inclusion in an ETF Can Improve the Pricing of Underlying Stocks
It can also help management make capital expenditure decisions
Loan Pool Covenants, Meant to Contain Risk, Can Instead Spread It
Forced sale of assets could stretch illiquidity across industries
Looming Risk to Financial System: $1 Trillion in Commercial Loan Pools
Known as collateralized loan obligations, their aim is actually to reduce risk
Market Bubbles Aren’t Entirely Irrational Exuberance
A model examines the relationships between innovation, speculation and market values
One Data Set That Warns Against Margin Trading
As a group, Chinese futures traders more likely to suffer margin call than to profit
One Way the Stock Market Sends Signals to Bond Traders
Thin stock trading, amid both price volatility and a period of potential economic change, leads bond investors to seek a higher yield
People Pay for the Right to Bid — and Then Overbid
Bidders sacrifice a better price to avoid ending up with nothing
Rethinking Buy-and-Hold Investing
The case for using rising market volatility as a signal to pare back on stocks — does higher risk always mean higher return?
Round-Number Bids Are Costly, but Up the Odds of a Deal
Buyers of private firms signal willingness to move fast
Separating Auditing from Consulting: More Complex than it Seems
Market concentration, price and quality drive choice of firms
Sorting Out Conflicts of Interest in Commercial Loan Syndicates
Syndicate voting rules reflect varying levels of trust and familiarity
The Mechanics of How Social Media Turbocharges Asset Bubbles
Establishment media coalesces around a lone narrative, but online chatter hops between storylines, sometimes shocking traders
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
The Role of Board-of-Directors Pay in Effective Corporate Investing
A model juggles who should suffer when a project goes awry; job market prospects of the CEO; and the quality of information shared in the boardroom
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