That's Interesting
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Corporate Mergers and Acquisitions Under Lender Scrutiny
15th May, 2024This paper examines corporate mergers and acquisitions (M&A) outcomes under lender scrutiny. Using the unique shocks of U.S. supervisory stress testing, we find that firms under increased lender scrutiny after their relationship banks fail stress tests engage in fewer but higher-quality M&A deals. Evidence from comprehensive supervisory data reveals improved credit quality for newly originated M&A-related loans under enhanced lender scrutiny.
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Betting on the Lives of Strangers: Life Settlements, Stoli & Securitization
12th May, 2024Life insurance serves the important purpose of providing a means for families and businesses to survive the premature death of a person whose support they require to maintain themselves. Over time, life insurance has become a much more sophisticated financial product incorporating savings plans, mutual fund investments, and securitizations. This article recounts the history of life insurance including the development of the insurable interest doctrine.
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The Evolving Index Effect: Evidence from Australia
09th May, 2024Evidence around the price response of stocks to index change announcements (the index effect) in Australia is mixed. In contrast to the U.S. market, results often point towards the absence of any index effects in Australia. By studying a comprehensive set of index announcements across S&P/ASX indexes, this article finds significant heterogeneity in the index effect across Australian securities. Additions to small capitalization indexes exhibit economically meaningful index effects, whereas additions to large capitalization indexes are largely insignificant.
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Noise in Expectations: Evidence from Analyst Forecasts
03rd May, 2024Analyst forecasts outperform econometric forecasts in the short run but underperform in the long run. This article decomposes these differences in forecasting accuracy into analysts’ information advantage, forecast bias, and forecast noise. It finds that noise and bias strongly increase with forecast horizon, while analysts’ information advantage decays rapidly.
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Fundamental Analysis via Machine Learning
01st May, 2024This article examines the efficacy of machine learning in a central task of fundamental analysis: forecasting corporate earnings. We find that machine learning models not only generate significantly more accurate and informative out-of-sample forecasts than the state-of-the-art models in the literature but also perform better compared to analysts’ consensus forecasts.
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Pink Floyd Plays in Venice on a Massive Floating Stage in 1989; Forces the Mayor & City Council to Resign
25th April, 2024When Roger Waters left Pink Floyd after 1983’s The Final Cut, the remaining members had good reason to assume the band was truly, as Waters proclaimed, “a spent force.” After releasing solo projects in the next few years, David Gilmour, Nick Mason, and Richard Wright soon discovered they would never achieve as individuals what they did as a band, both musically and commercially. Gilmour got to work in 1986 on developing new solo material into the 13th Pink Floyd studio album, the first without Waters, A Momentary Lapse of Reason.
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An Analysis of Decision Under Risk
21st April, 2024This paper presents a critique of expected utility theory as a descriptive model of decision making under risk, and develops an alternative model, called prospect theory. Choices among risky prospects exhibit several pervasive effects that are inconsistent with the basic tenets of utility theory.
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Methuselah: Still the world’s oldest tree?
18th April, 2024In eastern California, a Great Basin bristlecone pine (Pinus longaeva) known as Methuselah has long been considered Earth’s oldest living thing. According to tree-ring data, Methuselah is 4,853 years old — meaning it was well established by the time ancient Egyptians built the pyramids at Giza. And while Methuselah’s precise location is kept under wraps to protect it from harm, there’s much we do know about this living relic.
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Why loneliness is bad for your health
14th April, 2024A lack of social interaction is linked to a higher risk of cardiovascular disease, dementia and more. Researchers are unpicking how the brain mediates these effects.
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