One Factor You May Be Leaving Out of Your Financial Decision-Making
Do your choices reflect the marginal utility of money for you?
One Factor You May Be Leaving Out of Your Financial Decision-MakingIf stock prices deviate from their fair values, investors generally rush in to remedy the mispricing, according to traditional finance models. But Chicago Booth's Ralph S. J. Koijen, NYU's Robert J. Richmond, and Princeton's Motohiro Yogo find that some investors drive valuations more than others do. In a study of stocks at the close of the third quarter in 2020, the researchers calculated how much a company's market capitalization would have changed in a scenario in which an investor reacted to losing 10 percent of its assets. They ranked the results to identify those with the most individual power to alter a company's value, whether positive or negative.
Explore their findings below in a searchable database of more than 2,300 stocks, and read “Who Is Driving Stock Prices?” to learn more about this research.
Do your choices reflect the marginal utility of money for you?
One Factor You May Be Leaving Out of Your Financial Decision-MakingQuantitative easing may have played a part in the US financial sector’s current instability.
Did the Fed Contribute to SVB’s Collapse?A historical case study sheds light on the effects of bigger financial institutions.
Line of Inquiry: Kilian Huber on Who Benefits When Banks Get BiggerYour Privacy
We want to demonstrate our commitment to your privacy. Please review Chicago Booth's privacy notice, which provides information explaining how and why we collect particular information when you visit our website.