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Investment Choices (investment + choice)
Selected AbstractsAN INVESTIGATION OF HOME BIAS IN SUPERANNUATION INVESTMENT CHOICESECONOMIC PAPERS: A JOURNAL OF APPLIED ECONOMICS AND POLICY, Issue 1 2006PAUL GERRANS Australian superannuation funds have increased investment choices available for their members. Fund members can typically choose from a range of ready-made options or select their own asset allocations. Evidence suggests that individuals may display a home bias in these allocations by favouring domestic assets at the expense of international assets. Such a bias may produce a sub-optimal investment. This paper investigates the asset allocations of members of the Government Employees Superannuation Board (GESB), the superannuation fund for Western Australian public sector employees. Asset allocations appear to be in line with a normal allocation to international equity, especially at the time of their first choice. Subsequent choices however appear to be driven more by historical performance of the asset classes offered, rather than by a home bias. [source] How Much Investment Choice is Enough for Members?AUSTRALIAN ACCOUNTING REVIEW, Issue 40 2006PAUL GERRANS In recent years Australians have been given increased responsibility in making investment strategy decisions for their superannuation contributions. The investment choices superannuation funds typically offer include ready-made options with a strategic asset allocation or a "do-it-yourself option where the members choose their own asset allocation. This paper examines a sample of choices by members of a large industry fund which allows members any combination of six ready-made pools and eight asset classes. About one-quarter of these decisions involve choices which suggest a possibly naïve view of diversification unless members are conscious of resulting asset allocations. [source] Managerial optimism and investment choiceMANAGERIAL AND DECISION ECONOMICS, Issue 4 2010Florian Englmaier This paper analyzes whether it might be desirable for a firm to hire an overoptimistic manager to commit to a certain R&D strategy. I consider a Cournot model with an ex-ante R&D stage where firms can invest in cost reduction before product market competition takes place. I show that firms want to hire overoptimistic managers and argue that a manager's type may serve as a substitute for strategic delegation via contracts. Copyright © 2010 John Wiley & Sons, Ltd. [source] Portfolio risk and self-directed retirement saving programmes*THE ECONOMIC JOURNAL, Issue 494 2004James M. Poterba Defined contribution retirement plans expose retirement savers to financial market risks. This paper explores the costs of retirement wealth risk. It begins by describing the holding of company stock in 401(k) plans in the US, an investment choice that yields a poorly diversified retirement portfolio. It then summarises the composition of household wealth at retirement and investigates how the degree of diversification in retirement assets affects expected utility. The cost of holding a poorly diversified retirement portfolio is very sensitive to whether or not the retirement saver has other assets that provide a floor for retirement consumption. [source] Welfare-improving adverse selection in credit markets,INTERNATIONAL ECONOMIC REVIEW, Issue 4 2002James Vercammen A model of simultaneous adverse selection and moral hazard in a competitive credit market is developed and used to show that aggregate borrower welfare may be higher in the combined case than in the moral-hazard-only case. Adverse selection can be welfare improving because in the pooling equilibrium of the combined model, high-quality borrowers cross subsidize low-quality borrowers. The cross subsidization reduces the overall moral hazard effort effects, and the resulting gain in welfare may more than offset the welfare loss stemming from distorted investment choices. The analysis focuses on pooling equilibria because model structure precludes separating equilibria. [source] The Allocational Effects of the Precision of Accounting EstimatesJOURNAL OF ACCOUNTING RESEARCH, Issue 4 2007RONALD A. DYE ABSTRACT This paper studies the allocational effects associated with the precision of accounting estimates when the precision of estimates is a choice variable for firms. One part of the paper considers the effects of the observability of precision choices. We show that, generally, making precision choices private increases firms' equilibrium precision choices and also, as a by-product, their equilibrium investment choices. We further show that, when firms' precision choices are private, there may be a "disclosure trap," in which, unless investors conjecture the owner has chosen an estimate with the highest possible precision, the owner will respond to investors' conjecture by choosing an estimate whose precision is higher than investors' conjecture. In a multifirm version of the model with endogenous investment, we show that the equilibrium investment by the firm increases in the precision of the firm's own estimate and decreases in the precisions of other firms' estimates. Finally, we show that, in a setting where the firm's initial owner sells his stake in the firm over the course of two periods, with disclosures of estimates of the firm's value occurring prior to each sale of shares, if the precisions of the estimates are public, the equilibrium precisions of the estimates increase over time when the owner sells a sufficiently large fraction of the firm in the first period, and otherwise the equilibrium precisions of estimates remain constant over time. [source] A Martingale Characterization of Consumption Choices and Hedging Costs with Margin RequirementsMATHEMATICAL FINANCE, Issue 3 2000Domenico Cuoco This paper examines optimal consumption and investment choices and the cost of hedging contingent claims in the presence of margin requirements or, more generally, of nonlinear wealth dynamics and constraints on the portfolio policies. Existence of optimal policies is established using martingale and duality techniques under general assumptions on the securities' price process and the investor's preferences. As an illustration, explicit solutions are provided for an agent with ,logarithmic' utility. A PDE characterization of the cost of hedging a nonnegative path-independent European contingent claim is also provided. [source] Principles for sustainability rating of investment fundsBUSINESS STRATEGY AND THE ENVIRONMENT, Issue 1 2005Thomas Koellner During the last decade, the idea of sustainable investments hit the market. Investors both private and institutional started to supplement financial considerations with social and ecological ones. Meanwhile the supply of mutual funds in the ,green' investment sector increased enormously. Currently in Europe about 300 mutual funds are available that are managed according to sustainability and social responsibility. Potential investors face the difficulty of keeping track of the various funds and choosing among them based on a reliable comparative assessment. This paper outlines the basic principles and methods on which such a comparative sustainability rating is based. The method was designed to be analogous to rating of the funds financially. The sustainability rating is based on assessment of the research processes in the fund management as well as investigation of the fund portfolio in terms of composition and sustainability performance. It should support investors in their investment choices by offering them a third party view. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment. [source] | |||||||||||||