Journal articles: 'Preference stock'

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Kumar, Alok. "Dynamic Style Preferences of Individual Investors and Stock Returns." Journal of Financial and Quantitative Analysis 44, no. 3 (June 2009): 607–40. http://dx.doi.org/10.1017/s0022109009990020.

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AbstractThis study shows that individual investors systematically shift their preferences across extreme style portfolios (small vs. large, value vs. growth). These preference shifts are influenced by past style returns and earnings differentials, and advice from investment newsletters, but are unaffected by innovations in macroeconomic variables or shifts in expectations about future cash flows. Furthermore, investors’ dynamic style preferences influence returns along multiple dimensions: i) the contemporaneous relation between style returns and style-level preference shifts is strong, ii) there is weak evidence of style return predictability, and iii) the correlations among stocks within a style increase when investors move into or out of the style with greater intensity. Overall, the results indicate that stock categorization influences investors’ portfolio decisions and stock returns.

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Gupta, Nilesh, and Joshy Jacob. "The Interplay Between Sentiment and MAX: Evidence from an Emerging Market." Journal of Emerging Market Finance 20, no. 2 (January 21, 2021): 192–217. http://dx.doi.org/10.1177/0972652720969511.

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Investors with lottery preferences are known to concentrate on stocks with rare but extreme past returns. We investigate the extent to which lottery preference, measured by the MAX variable, varies with the market-wide irrational sentiment. We find that the high-MAX stocks have higher overpricing in a high-sentiment market and earn a lower alpha, compared to the low-sentiment market. Accordingly, the poor returns earned by a long-short portfolio of stocks with extreme MAX values are primarily due to the overvaluation of the high MAX-portfolio during the high sentiment phase. The higher stock volatility in India also magnifies the lottery preference of investors. JEL Classification: G4, G12, G41, G11

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Yang and Nguyen. "Skewness Preference and Asset Pricing: Evidence from the Japanese Stock Market." Journal of Risk and Financial Management 12, no. 3 (September 12, 2019): 149. http://dx.doi.org/10.3390/jrfm12030149.

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Previous studies have shown that investor preference for positive skewness creates a potential premium on negatively skewed assets. In this paper, we attempt to explore the connection between investors’ skewness preferences and corresponding demand for a risk premium on asset returns. Using data from the Japanese stock market, we empirically study the significance of risk aversion with skewness preference that potentially delivers a premium. Compared to studies on other stock markets, our finding suggests that Japanese investors exhibit preference for positively skewed assets, but do not display dislike for ones that are negatively skewed. This implies that investors from different countries having dissimilar attitudes toward risk may possess different preferences toward positive skewness, which would result in a different magnitude of expected risk premium on negatively skewed assets.

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Shiva, Atul, and Manjit Singh. "Stock hunting or blue chip investments?" Qualitative Research in Financial Markets 12, no. 1 (November 13, 2019): 1–23. http://dx.doi.org/10.1108/qrfm-11-2018-0120.

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Purpose The purpose of this paper is to study the individual investors’ preferences towards stock selection in social media environments. The study is conducted to understand the implications and conceptual directions for the corporates and financial advisors to understand the choices of individual investors applied in financial markets. Further, this study aims to examine the selection of the most preferred social media platform and behavioral intentions of investors towards selection of investment portfolios in Indian stock markets. Design/methodology/approach A questionnaire was designed based on the technique of conjoint analysis and was responded by 428 respondents belonging to the Northern region of India. The estimation of preference functions in Conjoint Analysis was designed by using orthogonal arrays and was calculated using the ordinary least square regression technique. Findings This study reveals that while making selection of desired investment portfolios, the investors give highest preference to social media platforms in terms of highest utility value and range followed by their preference for behavioral intentions to invest. Among different social media platforms, the investors preferred Twitter the most, followed by Facebook and the primary interest of investors was observed towards Intra-day trading purposes and balanced portfolio investments in financial markets. The major reason behind opting the social media platforms was selection of speculative stocks. Research limitations/implications The actual individual investment behavior cannot be observed through the survey, which limits the external validity of the study. Practical implications The paper presents a very important practical tool that can help financial advisors, opinion leaders and corporates in defining their target audience more sharply for investment-related advice. The findings revealed by the study will put them in a better position to understand how investors differ behaviorally and they will get acquainted with their choices and preferences while making investment decisions in the backdrop of social media environments. The preferences of the investors based on social media usage discovered by the study will not only enable the individual investors understand their own preferences, but those of the other investors as well in terms of planned investment decisions and choices. Originality/value The paper is a first of its kind to empirically identify the individual investors and their preferences and choices by applying conjoint analysis in the new social media environment. The study thus integrates the gap between marketing theories and emerging theories of behavioral finance to understand the investor behavior in a better way.

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Kuzmanovic, Marija, Dragana Makajic-Nikolic, and Nebojsa Nikolic. "Preference Based Portfolio for Private Investors: Discrete Choice Analysis Approach." Mathematics 8, no. 1 (December 24, 2019): 30. http://dx.doi.org/10.3390/math8010030.

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Behavioral finance literature shows that in addition to Markowitz’s rate of return and risk, private investors consider various other stock features. This paper discusses the problem of determining investors’ preferences for portfolio selection criteria, as well as the problem of optimal portfolio determination from the investors’ point of view. The study primarily focuses on private investors who are interested in one-time investments rather than stock trading. We use a discrete choice analysis and hierarchical Bayes method to measure individual investors’ preferences, and a logit model to determine individual shares of preferences. We treat the share of preferences as the share of certain stocks in an optimal portfolio. The proposed methodology is illustrated by the example of companies whose stocks are traded on the Belgrade Stock Exchange. We measure respondents’ preferences for companies, preferences for return rates, riskiness of stocks, and dividend rates. The results of comparing the performance of the resulting portfolio with the efficient frontier obtained using Markowitz’s portfolio theory indicate its high efficiency, thus validating the proposed approach.

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Zhang, Xiao-Jun. "Book-to-Market Ratio and Skewness of Stock Returns." Accounting Review 88, no. 6 (June 1, 2013): 2213–40. http://dx.doi.org/10.2308/accr-50524.

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ABSTRACT: This study demonstrates that stocks with low book-to-market ratios, also known as glamour stocks, have significantly more positive skewness in their return distributions compared to the return distributions of value stocks with high book-to-market ratios. The premium (discount) investors apply to these glamour (value) stocks also correlates significantly with the difference in return skewness. These findings suggest that the value/glamour-stock puzzle is partially explained by investor preference for positive skewness in stock returns. Such preference for skewness, which is consistent with investors having inverse S-shaped utility functions, is observed in such consumer behaviors as lottery purchases and gambling. This paper further documents significant predictive power of accounting-based measures, such as the book rate of return, with respect to the skewness of stock returns. Data Availability: Data are available from sources identified in the paper.

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NYAUPANE, NARAYAN, JEFFREY GILLESPIE, KENNETH MCMILLIN, ROBERT HARRISON, and ISAAC SITIENEI. "SELECTION OF BREEDING STOCK BY U.S. MEAT GOAT PRODUCERS." Journal of Agricultural and Applied Economics 49, no. 3 (April 20, 2017): 416–37. http://dx.doi.org/10.1017/aae.2017.6.

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AbstractUsing nationwide survey data, we investigate U.S. meat goat producer preferences and willingness to pay for meat goat breeding stock attributes. Discrete choice experiments were employed, and mixed logit and latent class models were used for analysis. Results showed that producers preferred animals that were highly masculine/feminine, had good structure and soundness, and were of the Boer breed, whereas they preferred fewer animals that were older, of Kiko and Spanish breeds, and priced higher. Significant preference heterogeneity was found among the respondents. Larger-scale producers had greater preference for high masculinity/femininity, good structure and soundness, and Boer bucks.

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O'Brien, John R. "Experimental Stock Markets with Controlled Risk Preferences." Journal of Accounting, Auditing & Finance 7, no. 2 (April 1992): 117–34. http://dx.doi.org/10.1177/0148558x9200700201.

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In this paper the empirical validity of the binary lottery preference inducing technique is tested in a real world market institution. In each market the potential gains to exchange arise from induced risk preferences, and the predicted competitive equilibrium is equivalent to the Pareto optimal risk sharing allocation. Price convergence to (and near) the competitive equilibrium price was rapid in each market, and most trades were individually rational with respect to induced certainty equivalents. This evidence implies that preferences can be induced in an oral double auction institution, using this technique.

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Mason, Helen B., and Roger M. Shelor. "Stock Splits: An Institutional Investor Preference." Financial Review 33, no. 4 (November 1998): 33–46. http://dx.doi.org/10.1111/j.1540-6288.1998.tb01395.x.

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Liu, Chun-Wen, and Chao Deng. "Stated preferences of Taiwanese investors for financial products." Qualitative Research in Financial Markets 11, no. 4 (November 4, 2019): 411–28. http://dx.doi.org/10.1108/qrfm-06-2018-0079.

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Purpose The popularity of wealth management in Taiwan has unleashed tense competition among financial advisors. Consumers are now more conscious of their financial services purchasing behavior. This paper aims to provide insights into local-specific investors’ characteristics and consumers’ financial product preferences and to introduce a different concept to identify localization-suitable products. Design/methodology/approach To understand customers’ preferred products, the paper examines consumers’ financial behavior by analyzing preference characteristics using data collected from Taiwanese investors. The study entailed a questionnaire designed for consumers using the stated preferences method and the multinomial and nested logit models to develop preference models for consumers’ financial products. A statistical test using the t-value, likelihood and ρ2 to observe investor preference product reactions was also used. Findings The study finds that investors are sensitive to the rate of return on investments and performance changes in foreign currency, stock and mutual funds. An elasticity analysis and prediction of the market share among interactive products show that stock and mutual funds are strongly related and the rate of return on stock undoubtedly influences the market. Originality/value The stated preference method and inclusion of risk appetite improve our understanding of consumer choice and investors’ financial product preferences and characteristics. The results provide suitable localization product suggestions for financial institutions to help them understand their customers’ behaviors better. This paper’s results are also useful in the context of smart financial services such as financial robot technology.

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YANG, YINAN, and QIAN WANG. "INSURANCE INCLUSION, TIME PREFERENCE AND STOCK INVESTMENT OF THE CHINESE HOUSEHOLDS." Singapore Economic Review 63, no. 01 (February 8, 2018): 27–44. http://dx.doi.org/10.1142/s0217590817440039.

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Using the China Household Finance Survey data in 2011, the estimation results of structural equation modeling demonstrate that the respondents with higher time preference rate have a significant higher probability of investing in stocks, which implies that the short-term households will prefer stock investment. The social insurance programs and insurance policies held by the family will have a significantly direct positive effect in promoting stock investment and also a significantly direct positive effect on the respondent’s time preference, which could further indirectly increase the family’s stock investment. These results show that the safety-net built by the Chinese government, including the social security and commercial insurance, is very likely to attract more short-term investors into the stock market. These empirical results provide new evidences to explain the extreme volatility of Chinese stock market and also testify the policy effect of building an environment for people to possess property income in China.

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Autore, Don M., and Jared R. DeLisle. "Skewness Preference and Seasoned Equity Offers." Review of Corporate Finance Studies 5, no. 2 (January 25, 2016): 200–238. http://dx.doi.org/10.1093/rcfs/cfw001.

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We find that the degree of expected idiosyncratic skewness in seasoned equity issuers’ stock returns is an important determinant of flotation costs and subsequent abnormal stock performance. High skewness issuers incur significantly greater offer price discounts, particularly when institutional share allocation is largest, pay higher gross underwriting spreads, and exhibit poorer stock performance in the three years after issuance, all compared to low skewness issuers. These results suggest that skewness-induced overpricing increases the flotation costs of seasoned equity offers and leads to poor subsequent stock performance. Received November 18, 2014; accepted December 17, 2015 by Editor Paolo Fulghieri.

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Wen, Fenghua, Zhifang He, and Xiaohong Chen. "Investors’ Risk Preference Characteristics and Conditional Skewness." Mathematical Problems in Engineering 2014 (2014): 1–14. http://dx.doi.org/10.1155/2014/814965.

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Perspective on behavioral finance, we take a new look at the characteristics of investors’ risk preference, building the D-GARCH-M model, DR-GARCH-M model, and GARCHC-M model to investigate their changes with states of gain and loss and values of return together with other time-varying characteristics of investors’ risk preference. Based on a full description of risk preference characteristic, we develop a GARCHCS-M model to study its effect on the return skewness. The top ten market value stock composite indexes from Global Stock Exchange in 2012 are adopted to make the empirical analysis. The results show that investors are risk aversion when they gain and risk seeking when they lose, which effectively explains the inconsistent risk-return relationship. Moreover, the degree of risk aversion rises with the increasing gain and that of risk seeking improves with the increasing losses. Meanwhile, we find that investors’ inherent risk preference in most countries displays risk seeking, and their current risk preference is influenced by last period’s risk preference and disturbances. At last, investors’ risk preferences affect the conditional skewness; specifically, their risk aversion makes return skewness reduce, while risk seeking makes the skewness increase.

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Zopounidis, Constantin, Michael Doumpos, and Stelios Zanakis. "Stock Evaluation Using a Preference Disaggregation Methodology." Decision Sciences 30, no. 2 (March 1999): 313–36. http://dx.doi.org/10.1111/j.1540-5915.1999.tb01612.x.

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Arora, Sangeeta, and Kanika Marwaha. "Variables influencing preferences for stocks (high risk investment) vis-à-vis fixed deposits (low-risk investment)." International Journal of Law and Management 56, no. 4 (July 8, 2014): 333–43. http://dx.doi.org/10.1108/ijlma-07-2013-0032.

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Purpose – The paper, an exploratory attempt, aims to analyze the perception of individual investors of stock market of Punjab towards investing in stocks vis-à-vis fixed deposits. For the purpose, the most and least influencing variables affecting the decisions of individual stock investors to invest in stocks and fixed deposits were gauged and the comparison for such variables influencing their preferences was conducted. Design/methodology/approach – A pre-tested, well-structured questionnaire which was administered personally and the responses of 241 respondents were analyzed. The responses have been analyzed with the help of weighted average scores method used to identify the most and least influencing variables and paired sample t-test is applied to the data to identify if there exists any significant difference in the variables influencing the investment preferences for stocks (high-risk investment) vis-à-vis fixed deposits (low- and medium-risk investment). Findings – High returns was found as the most important variable while investing in stocks and stability of income as the most important variable while investing in fixed deposits. Religious reason is the only variable found as the least influencing variable for individual investors in Punjab while investing in both avenues, i.e. stocks and fixed deposits. Statistically significant difference exists in perception of individual investors for 22 variables towards the preference for stocks vis-à-vis fixed deposits. Practical implications – The current research will be helpful for financial service providers in understanding the investment preferences of the individual stock investors on the basis of variables influencing such preferences and suggest them investment options as per their perceptions and needs. Originality/value – This paper is a first of its kind to empirically compare the variables influencing the preferences for high-risk investments vis-à-vis low-risk investments of individual investors of Punjab, India and contributes to the understanding of the investor behaviour.

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Baltussen, Guido, Sjoerd van Bekkum, and Bart van der Grient. "Unknown Unknowns: Uncertainty About Risk and Stock Returns." Journal of Financial and Quantitative Analysis 53, no. 4 (July 18, 2018): 1615–51. http://dx.doi.org/10.1017/s0022109018000480.

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Stocks with high uncertainty about risk, as measured by the volatility of expected volatility (vol-of-vol), robustly underperform stocks with low uncertainty about risk by 8% per year. This vol-of-vol effect is distinct from (combinations of) at least 20 previously documented return predictors, survives many robustness checks, and holds in the United States and across European stock markets. We empirically explore the pricing mechanism behind the vol-of-vol effect. The evidence points toward preference-based explanations and away from alternative explanations. Collectively, our results show that uncertainty about risk is highly relevant for stock prices.

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Yodmun, Satit, and Wichai Witayakiattilerd. "Stock Selection into Portfolio by Fuzzy Quantitative Analysis and Fuzzy Multicriteria Decision Making." Advances in Operations Research 2016 (2016): 1–14. http://dx.doi.org/10.1155/2016/9530425.

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This paper presents a stock selection approach assisted by fuzzy procedures. In this approach, stocks are classified into groups according to business types. Within each group, the stocks are screened and then ranked according to their investment weight obtained from fuzzy quantitative analysis. Groups were also ranked according to their group weight obtained from fuzzy analytic hierarchy process (FAHP) and technique for order preference by similarity to ideal solution method (TOPSIS). The overall weight for each stock was then derived from both of these weights and used for selecting a stock into the portfolio. As a demonstration, our analysis procedures were applied to a test set of data.

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Gou, Xiaoju, and Limei Bie. "Research on Investment Preference and the MAX Effect in Chinese Stock Market." Journal of Systems Science and Information 4, no. 6 (December 25, 2016): 519–33. http://dx.doi.org/10.21078/jssi-2016-519-15.

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AbstractInvestors prefer to invest the stocks with high history returns, which results in that the return of the stock with high history maximum return is often lower than that with low history maximum return, i.e., the MAX effect. We show that the MAX effect is also significant in China stock market, that is, there is a significant negative relationship between maximum return and expected return. We then conduct portfolio analysis and Fama-Macbeth cross-sectional regression and find that range of price and turnover rate can explain the MAX effect in a certain extent, idiosyncratic volatility and idiosyncratic skewness cannot explain the negative relationship between maximum return and expected return. Moreover, maximum return explains the idiosyncratic volatility puzzle partially.

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Kudou, Takako, and Nakako Matsumoto. "Labeled ingredients and preference for instant soup stock." Journal for the Integrated Study of Dietary Habits 25, no. 4 (2015): 283–92. http://dx.doi.org/10.2740/jisdh.25.283.

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Shahidin, Ainon Mardhiyah, Shahirulliza Shamsul Ambia Othman, and Nur Syahirah Mohd Razali. "Stock portfolio selection based on investors’ risk preference." Journal of Physics: Conference Series 1988, no. 1 (July 1, 2021): 012044. http://dx.doi.org/10.1088/1742-6596/1988/1/012044.

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Wafula, Lugongo Maurice, and Dr Sifunjo E. Kisaka. "AN EMPIRICAL STUDY OF PRICE CLUSTERING ON THE NAIROBI SECURITIES EXCHANGE." International Journal of Finance and Accounting 2, no. 2 (February 14, 2017): 23. http://dx.doi.org/10.47604/ijfa.295.

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Purpose: The purpose of this study was to empirically investigate price clustering phenomenon on the Nairobi Securities Exchange for the period 2009 to 2013.Materials and methods: The study used secondary sources of data obtained from the Nairobi Securities exchange. The study revealed that there has been a preference by investors for stock whose prices end with the digit 5 and this accounted for 67.88 percent of all the stocks examined and was followed by stocks whose prices ended with the digit 0 which accounted for 4.55 percent. In order to establish the determinants of this observed behavior a multivariate regression model used by Harris (1991) was adopted where price clustering was regressed against stock volatility, number of trades, market capitalization, and own stock price.Results: The regression results indicated that the number of trades as well as Market Capitalization was positive and significantly related to price clustering. The study also found the stock price to be negative and significantly related to price clustering. On the other hand, Stock volatility was established to be an insignificant predictor of price clustering. The multivariate regression model was found to be significant in explaining the observed relationship and that 15.4 percent of the variance in price clustering was explained by number of trades, stock volatility, own stock price and the market capitalization. The study finds that there is a tendency of prices to cluster around certain numbers as evidenced by the 67.88 percent of numbers clustering around the number 5 and that price clustering is positively related to number of tradesRecommendations: It is thus recommended that if firms are to increase the number of trades of their shares they should consider pricing their shares according to the preferences of investors who prefer shares or stocks whose prices ends with 5 or 0.

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Franke, Günter, and Erik Lüders. "Instability of Financial Markets and Preference Heterogeneity." Advances in Decision Sciences 2010 (June 23, 2010): 1–27. http://dx.doi.org/10.1155/2010/791025.

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This paper presents a simple rational expectations model of intertemporal asset pricing relating instability of stock return characteristics to heterogeneity in investor preferences. Heterogeneity is likely to generate declining aggregate relative risk aversion. This leads to variability in expected asset returns, volatility, and autocorrelation. The stronger this variability is, the more heterogeneous preferences are, implying more instability of financial markets. Stock market crashes may be observed if relative risk aversion differs strongly across investors.

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Pokharel, Post Raj. "A Survey of Investors Preference on Stock Market : A Case of Nepal Stock Exchange." Saptagandaki Journal 9 (August 26, 2018): 53–61. http://dx.doi.org/10.3126/sj.v9i0.20880.

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This paper shows investors preference on stock market of Nepal Stock Exchange (NEPSE). The study is based on survey method using structured questionnaire. The results demonstrated that investors were found to have investment interest in secondary market. The reasons for selecting shares are mostly liquidity and high rate of earning. The investors' perception regarding the influencing factors for the investment decision in secondary market of NEPSE is the advice of brokers and then movement of indices. The news in daily newspaper and market sentiments are viewed as least influencing factors for investment decision. Most motivating factors prioratized by respondents were capital gains, then liquidity and then dividend, safety and bonus shares. The motivating factors like tax benefits and rights shares were under least preference by the respondents. The Sapta Gandaki JournalVol. IX, 2018 Feb. Page: 53-61

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Qiao, Zhuo, Ephraim Clark, and Wing-Keung Wong. "Investors’ preference towards risk: evidence from the Taiwan stock and stock index futures markets." Accounting & Finance 54, no. 1 (September 26, 2012): 251–74. http://dx.doi.org/10.1111/j.1467-629x.2012.00508.x.

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Chen, Junying, Haoyu Zeng, and Fei Yang. "Parameter estimation for employee stock ownerships preference experimental design." Journal of Applied Statistics 43, no. 8 (January 24, 2016): 1525–40. http://dx.doi.org/10.1080/02664763.2015.1117583.

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Narayan, Paresh Kumar, and Seema Narayan. "Do opinion polls on government preference influence stock returns?" Journal of Behavioral and Experimental Finance 30 (June 2021): 100493. http://dx.doi.org/10.1016/j.jbef.2021.100493.

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Silver, Steven D. "Representing Social Construction in Consumer Activities: Single-Period and Multi-Period Activity Production." Journal of Interdisciplinary Economics 5, no. 3 (July 1994): 139–56. http://dx.doi.org/10.1177/02601079x9400500302.

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Consumers are seen as limited decision makers who set short-term activity levels from their budgets, stocks of experience, and values following a preference-maximizing heuristic. Disturbances to activity levels in their evolution by exogeneties of social and economic environments, and the feedback of activity levels which agents have no systematic ability to anticipate, reset stock and value levels through the interactive relationships among endogenous variables. Agents then solve the maximization problem for a subsequent period using stock and value levels as modified by the evolutionary process. The dependence of a single-period decision on the stock and value constructs is examined and forms for the dynamic evolution of stock and value constructs that represent the feedback of activity levels to stock and value levels are also introduced. Implications of these forms for the social construction of activities are discussed.

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Tashfeen, Rubeena, Saad Ullah, and Abubaker Naeem. "Investor Behavior: Does Tax Avoidance and Liquidity Preference Culture Drive Equity Prices in Pakistan." Journal of Finance and Accounting Research 2, no. 2 (August 31, 2020): 63–91. http://dx.doi.org/10.32350/jfar/2020/0202/852.

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The present study investigates market-wide herding of stock market, industry indices of Pakistan, China and USA, A-cross border herding of Pakistan stock market with Chinese stock market and USA stock market. With Cross-Sectional-Absolute-Deviation, to check whether geographical distance matters to influence the stock markets or not and USA is its major influential, cannot be ignored. Market-wide herding in Pakistan is found only during 2004 and 2008 and A-cross border herding for Pakistan is only found from the USA which support asset pricing model and market efficiency. Pakistan market do not herd around China, this negates geographical distance matters, and influence in determining investor behaviour in stock markets. It is revealed, Pakistan stock market does not observe as much herding behaviour in stock investment as other markets (USA and China), so it can be said that Pakistan stock exchange index which is representative of Pakistan Stock market is efficiently operating in contest of Herding.

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Gu, Ruitao, Qingjuan Chen, and Qiaoyun Zhang. "Portfolio Selection with respect to the Probabilistic Preference in Variable Risk Appetites: A Double-Hierarchy Analysis Method." Complexity 2021 (April 17, 2021): 1–14. http://dx.doi.org/10.1155/2021/5512770.

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Traditional portfolio selection models mainly obtain the optimized portfolio ratio by focusing on the prices of financial products. However, investors’ multiple preferences and risk appetites are also significant factors that should be taken into account. In consideration of these two factors simultaneously, we propose a double-hierarchy model in this paper. Specifically, the first hierarchy quantifies investors’ risk appetite based on a historical simulation method and probabilistic preference theory. This hierarchy can be utilized to describe investors’ variable risk appetites and ensure the obtained investment ratios meet investors’ immediate risk requirements. Then, using the cross-efficiency evaluation principle, the optimal investment ratios can be derived by fusing investors’ multiple preferences and risk appetites in the second hierarchy. Lastly, an illustrative example about evaluating the 10 largest capitalized stocks on the Shenzhen Stock Exchange is given to verify the feasibility and effectiveness of our newly proposed model. We make the theoretical contribution to improve the traditional portfolio selection model, especially considering investors’ subjective preferences and risk appetite. Moreover, the proposed model can be practical for assisting investors with their investment strategies in real life.

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Kim, Yoonmin, and Gab-Je Jo. "The Impact of Foreign Investors on the Stock Price of Korean Enterprises during the Global Financial Crisis." Sustainability 11, no. 6 (March 15, 2019): 1576. http://dx.doi.org/10.3390/su11061576.

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This paper investigates the impact and behavior of foreign equity investment on the price of the nine largest KOSPI (Korea Composite Stock Price Index) enterprises and Samsung Electronics preference stocks in terms of market capitalization during the global financial crisis (2 January 2007 to 30 December 2008). The empirical results indicate that foreign investors show strong, positive feedback trading behavior with regard to the stock price of Samsung Electronics, which is the largest KOSPI enterprise in terms of market capitalization. We also found evidence that the behavior of foreign investors significantly increased volatility in the stock returns of the two largest Korean conglomerates (Samsung Electronics and Hyundai Motors), which account for approximately 25 percent of total KOSPI market capitalization.

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Chazi, Abdelaziz, Alexandra Theodossiou, and Zaher Zantout. "Corporate payout-form: investors’ preference and catering theory." Managerial Finance 44, no. 12 (December 3, 2018): 1418–33. http://dx.doi.org/10.1108/mf-03-2018-0127.

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Purpose The purpose of this paper is to develop and validate new robust measures of investors’ preference for the form of regular corporate payout. Then, the paper adds to the empirical evidence on catering theory by examining managers’ catering to such preference. Design/methodology/approach The authors use the matching method to control for firm characteristics. The authors apply two robustness tests to validate the measures. The authors use the rigorous multivariate analysis. Findings US investors’ preference for regular dividends vs regular stock repurchases, being different forms of corporate payout, varies over time. Managers cater to investors’ preference for payout form. The findings are consistent with the catering theory of Baker and Wurgler (2004a). The number of firms that pay cash dividends regularly continue to outnumber the ones that purchase their shares regularly. Research limitations/implications The study only uses US data. It does not cover other countries. Practical implications The measures can be used in several future research endeavors, such as examining investors’ payout-form preferences in other countries (see Booth and Zhou, 2017) and exploring their determinants, the corporate governance characteristics of firms that cater to investors’ preference vs firms that do not, etc. Social implications The study contributes to understanding investors’ preferences and corporate payout behavior which is prerequisite to efficient policy formulation. Originality/value The proxies for investors’ payout-form preference control for firm characteristics and are unrelated to investors’ time-varying risk preferences. Also, they are robust to measurement issues. Moreover, the study covers a period of 40 years.

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Levy, Haim. "The Investment Home Bias with Peer Effect." Journal of Risk and Financial Management 13, no. 5 (May 11, 2020): 94. http://dx.doi.org/10.3390/jrfm13050094.

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Observed international diversification implies an investment home bias (IHB). Can bivariate preferences with a local domestic peer group rationalize the IHB? For example, it is argued that wishing to have a large correlation with the Standard and Poor’s 500 stock index (S&P 500 stock index) may induce an increase in the domestic investment weight by American investors and, hence, rationalize the IHB. While this argument is valid in the mean-variance framework, employing bivariate first-degree stochastic dominance (BFSD), we prove that this intuition is generally invalid. Counter intuitively, employing “keeping up with the Joneses” (KUJ) preference with actual international data even enhances the IHB phenomenon.

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Wen, Fenghua, Zhifang He, Xu Gong, and Aiming Liu. "Investors’ Risk Preference Characteristics Based on Different Reference Point." Discrete Dynamics in Nature and Society 2014 (2014): 1–9. http://dx.doi.org/10.1155/2014/158386.

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Taking the stock market as a whole object, we assume that prior losses and gains are two different factors that can influence risk preference separately. The two factors are introduced as separate explanatory variables into the time-varying GARCH-M (TVRA-GARCH-M) model. Then, we redefine prior losses and gains by selecting different reference point to study investors’ time-varying risk preference. The empirical evidence shows that investors’ risk preference is time varying and is influenced by previous outcomes; the stock market as a whole exhibits house money effect; that is, prior gains can decrease investors’ risk aversion while prior losses increase their risk aversion. Besides, different reference points selected by investors will cause different valuation of prior losses and gains, thus affecting investors’ risk preference.

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ZHANG, HAROLD H. "ENDOGENOUS SHORT-SALE CONSTRAINT, STOCK PRICES AND OUTPUT CYCLES." Macroeconomic Dynamics 1, no. 1 (January 1997): 228–54. http://dx.doi.org/10.1017/s1365100597002083.

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This study examines the effect of short-sale constraints on a stock market, in particular, on stock prices, trading volume, and the relationship between stock price movements and output cycles. The economic model features incomplete markets and heterogeneous agents. The short-sale constraint is endogenously determined in the economy and is a function of agents' risk aversion, time preference, and exogenous driving forces. The dynamic model is solved using a policy function iteration algorithm. We find that, for an array of reasonable time-preference parameters and risk-aversion coefficients, the short sale limits range from 27 to 45% of total outstanding shares. Imposing short-sale constraints causes stock prices to move upward. Trading volume is high when some agents have a large amount of stock holdings but incur a negative shock on their nonfinancial income and is low when some agents have few stock holdings and also incur a negative shock to their nonfinancial income. Stock prices are found to be countercyclical and the expected stock returns are procyclical. These countercyclical stock-price movements are shown to be related to the imposition of a short-sale constraint.

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DeLisle, R. Jared, and Nathan Walcott. "The Role of Skewness in Mergers and Acquisitions." Quarterly Journal of Finance 07, no. 01 (February 21, 2017): 1740001. http://dx.doi.org/10.1142/s2010139217400018.

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Investors prefer stocks with idiosyncratic skewness in their returns, which may be evidence of behavioral biases. Previous research suggests that skewness is related to the choice of target in corporate acquisitions, which may reflect CEOs’ behavioral biases. However, if the acquiring firms’ stock returns are also skewed, then the acquirer CEOs may rationally use their stock as currency in these deals. We investigate the skewness of the acquiring firm and the method of payment to determine if takeovers involving high skewness stocks are consistent with shareholder wealth maximization. We find that firms with high levels of skewness are more likely to become takeover targets and that takeover premiums increase with skewness, but there is no relation between the target’s skewness level and acquirer announcement returns. We also find that acquirers with high skewness are more likely to pay with stock and have higher announcement returns. We conclude that acquirer CEOs often take advantage of investor preference for skewness when undertaking mergers and acquisitions activity.

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Hedesström, Martin, Maria Andersson, Tommy Gärling, and Anders Biel. "Stock investors’ preference for short-term vs. long-term bonuses." Journal of Socio-Economics 41, no. 2 (April 2012): 137–42. http://dx.doi.org/10.1016/j.socec.2011.12.010.

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Cai, Huan, Meining Wang, and Chaonan Bai. "An Empirical Study of Investors’ Disposition Effect in China Based on Open Data from the Chinese Stock Markets." International Journal of Economics and Finance 10, no. 5 (April 13, 2018): 165. http://dx.doi.org/10.5539/ijef.v10n5p165.

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This paper focuses on investors’ different behavioral biases in China’s segmented stock markets and investigates the correlation between average holding periods, stock returns and investors’ disposition effect between 2010 and 2014. The results show that the disposition effect is prevalent in A-share market but is very weak in Growth Enterprise market and there is a lack of evidence to support the existence of disposition effect in B-share market. The study supports the view that investors’ experience and sophistication can partly help reduce investors’ behavioral biases in stock markets. It also indicates that investors in A-shares market prefer to hold stocks with larger market capitalization for longer periods, while investors of B-shares markets and Growth Enterprise market do not reveal a specific preference for market capitalization.

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K., Riyazahmed. "Investment motives and preferences – An empirical inquiry during COVID-19." Investment Management and Financial Innovations 18, no. 2 (April 9, 2021): 1–11. http://dx.doi.org/10.21511/imfi.18(2).2021.01.

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Following the COVID-19 breakout, investment in shares, mutual funds, and life insurance are witnessing a growing trend in India. Hence, examining the determinants of investor preferences is necessary to maintain a positive trend. This study analyzes the impact of investor motives and awareness on investor preferences using the data collected from 753 Indian investors in 2020. Factor analysis grouped the investment motives into six categories, namely Nature of investments, Future financial needs, Investor personal characteristics, Safety and stability of investments, Investor behavioral aspects, and Investor’s options. The regression model used to find the impact of the investment motives and the awareness on the investor preferences explains 52.3% of changes in investor preference. Investment factors like Nature of investments, Investor personal characteristics, Investor behavior, Investor options, Awareness of mutual funds, and shares have a significant impact on investor preferences. Further, the awareness level of mutual funds and the stock market are the major variables contributing to Investors’ preference rather than identified investment factors. Investors’ personal characteristics like knowledge, confidence, ability, responsibility, and belief negatively influence investor preferences. This study adds to the existing literature by analyzing investment motives and preferences during the pandemic.

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Vestman, Roine. "Limited Stock Market Participation Among Renters and Homeowners." Review of Financial Studies 32, no. 4 (August 10, 2018): 1494–535. http://dx.doi.org/10.1093/rfs/hhy089.

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Abstract The stock market participation rate among homeowners is twice as high as among renters. This paper builds a life-cycle portfolio choice model with endogenous housing tenure choice. A stylized form of preference heterogeneity generates a substantial difference in participation rates. A majority of households have a large savings motive and choose to be homeowners and participate. A minority of households have a small savings motive and find it less worthwhile to participate. Fewer of these households become homeowners. Difference-in-difference regressions on panel data do not find evidence of a crowding-out effect of homeownership on participation, supporting the message that preference heterogeneity matters. Received January 25, 2017; editorial decision March 21, 2018 by Editor Wei Jiang. Authors have furnished an Online Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

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Peswani, Shilpa, and Mayank Joshipura. "Leverage constraints or preference for lottery: What explains the low-risk effect in India?" Investment Management and Financial Innovations 18, no. 2 (April 16, 2021): 48–63. http://dx.doi.org/10.21511/imfi.18(2).2021.05.

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The study empirically investigates two theories that claim to explain the low-risk effect in Indian equity markets using a universe of stocks listed on the National Stock Exchange of India (NSE) from January 2000 to September 2018. Leverage constraints and preference for lottery are two major competing theories that explain the presence and persistence of the low-risk effect. While the leverage constraints theory argues that systematic risk drives low-risk anomaly and therefore risk should be measured using beta, lottery demand theory claims that irrational investor’s preference towards stocks with lottery-like payoffs is responsible for the persistence of the low-risk effect, and risk should be measured by idiosyncratic volatility. However, given that most of the risk measures are highly correlated, it is not easy to precisely measure a specific theory’s contribution to explaining the low-risk effect. The study constructs the Betting against correlation (BAC) factor to measure the contribution of leverage constraints to the low-risk effect. It further constructs the SMAX factor to untangle the contribution of lottery preference theory. The results show that leverage constraints theory predominantly explains the low-risk effect in Indian markets. This study contributes significantly to the body of literature, as this is the first such study on the Indian market, one of the major emerging markets, especially when the debate on theories explaining the low-risk effect is yet to settle.

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Baucells, Manel, and Lin Zhao. "Everything in Moderation: Foundations and Applications of the Satiation Model." Management Science 66, no. 12 (December 2020): 5701–19. http://dx.doi.org/10.1287/mnsc.2019.3505.

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Models in which current utility depends solely on current consumption (a.k.a. time-separable preferences) are widely acknowledged to be unrealistic, especially when attempting to describe preferences over consumption rates. Alternatively, one may stipulate that instant utility also depends on a state, for example, some stock of past consumption. Escaping the gravitational pull of time separability, however, is difficult because (1) the behavioral axioms that characterize the state and the instant utility are not known, (2) how to elicit the preference parameters—most notably the initial level of the state and the decay rate—is not known, and (3) managerial applications where state-dependent preferences produce interesting insights and solutions are scarce. This paper makes advances on these three fronts by proposing a novel set of axioms that characterize the satiation model, a proof of concept on how to elicit all preference parameters using consumption rates, and a mixed-integer linear formulation to solve the optimal design of experiential services under satiation. Our preferences introduce a de-satiation motive, absent in separable preferences, and we explore how to optimally manage this motive. This paper was accepted by David Simchi-Levi, decision analysis.

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Amri, Muhtadin. "PENGARUH KOMPENSASI MANAJEMEN TERHADAP PENGHINDARAN PAJAK DENGAN MODERASI DIVERSIFIKASI GENDER DIREKSI DAN PREFERENSI RISIKO EKSEKUTIF PERUSAHAAN DI INDONESIA." Jurnal ASET (Akuntansi Riset) 9, no. 1 (November 13, 2017): 1. http://dx.doi.org/10.17509/jaset.v9i1.5253.

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Abstract. This study aims to examine the effect of management compensation on corporate tax evasion, as well as to examine the influence of board gender diversity and the executive risk preference on the relationship between management compensation and tax evasion. This study uses balanced panel data of 404 companies listed on Indonesia Stock Exchange from 2012 to 2015. The result shows that the management compensation has the negative effect of tax evasion. Furthermore, the use of moderating variables, the board gender diversity, and the executive risk preferences, shows that the compensation would have a positive effect on corporate tax evasion when given to executives who have gender diversity. It is shown at least there is one female director who has risk preference as a risk taker.Keywords: compensation management; board of gender diversity; executive risk preferenceAbstrak. Penelitian ini bertujuan untuk menguji pengaruh kompensasi manajemen terhadap penghindaran pajak perusahaan, serta menguji pengaruh dari diversifikasi gender eksekutif dan preferensi risiko eksekutif terhadap hubungan antara kompensasi manajemen terhadap penghindaran pajak. Penelitian ini menggunakan data balanced panel berjumlah 404 tahun perusahaan yang terdaftar di Bursa Efek Indonesia dari tahun 2012-2015. Hasil penelitian menunjukkan bahwa kompensasi manajemen berpengaruh negatif terhadap penghindaran pajak. Selanjutnya, penggunaan variabel moderasi yaitu diversifikasi gender eksekutif dan preferensi risiko eksekutif menunjukkan temuan bahwa kompensasi akan berpengaruh positif terhadap penghindaran pajak perusahaan apabila diberikan kepada eksekutif yang memiliki diversifikasi gender yang ditunjukkan dengan setidaknya terdapat satu direksi wanita dan yang memiliki preferensi risiko risk taker. Kata Kunci: kompensasi manajemen; board gender diversity; preferensi risiko eksekutif

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Wang, Di, Frank McGroarty, and Eng-Tuck Cheah. "Chronotype, Risk and Time Preferences, and Financial Behaviour." Algorithms 11, no. 10 (October 10, 2018): 153. http://dx.doi.org/10.3390/a11100153.

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This paper examines the effect of chronotype on the delinquent credit card payments and stock market participation through preference channels. Using an online survey of 455 individuals who have been working for 3 to 8 years in companies in mainland China, the results reveal that morningness is negatively associated with delinquent credit card payments. Morningness also indirectly predicts delinquent credit card payments through time preference, but this relationship only exists when individuals’ monthly income is at a low and average level. On the other hand, financial risk preference accounts for the effect of morningness on stock market participation. Consequently, an additional finding is that morningness is positively associated with financial risk preference, which contradicts previous findings in the literature. Finally, based on the empirical evidence, we discuss the plausible mechanisms that may drive these relationships and the implications for theory and practice. The current study contributes to the literature by examining the links between circadian typology and particular financial behaviour of experienced workers.

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Matthews, Gilbert E. "Impact of Contractual Rights on Preferred Stock Valuations in Delaware." Business Valuation Review 38, no. 2 (December 2019): 92–102. http://dx.doi.org/10.5791/19-00001.1.

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The rights and the value of preferred stock have been the subject of several Delaware court decisions. These decisions are particularly significant for understanding the importance of contractual rights as the defining attribute affecting the valuation of preferred stock. Directors' fiduciary duties are primarily to common shareholders, while obligations to preferred shareholders are primarily contractual. Preferred stocks' contractual rights, as interpreted in these decisions, directly affects the value of the preferred and the common. When common shareholders control the board, the impact on the preferred can be negative. The common may be adversely impacted when preferred shareholders, particularly venture capitalists, control the board. Some commentators have argued that, when going-concern value is less than the preferred's preference, common stockholders should be entitled to the option value of their shares.

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Francis, Jesse, Katherine Thompson-Witrick, and Erin B. Perry. "104 President Oral Presentation Pick: Sensory analysis of horse treats: a comparison between horses and humans." Journal of Animal Science 98, Supplement_4 (November 3, 2020): 91. http://dx.doi.org/10.1093/jas/skaa278.166.

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Abstract Analysis of both palatability and consumer acceptance is a critical component of product development. Though consumer sensory analysis from owners is gaining interest in companion animal species, few data are available from equine owners. The objectives of this study were to evaluate both horse preference and horse owner rating of two equine treat products. Feeding preferences of adult stock-type horses (n = 10) age 13 ± 6, body weight 539 ± 41 kg, and body condition score 5.5 ± 0.5 were assessed via paired preference test conducted in an open-frame stock with a 15 second olfaction period followed by a 3 minute consumption period. Data collected include first sniffed, first consumed, and first finished. Consumer analysis of the horse treats was conducted via hedonic rating of four attributes (appearance, size, texture, and aroma) on a 9-point Likert scale, followed by rating of purchase intent on a 5 point Likert scale. Data were analyzed using PROC FREQ and PROC TTEST in SAS version 9.4. No difference was observed for first product sniffed, consumed, or finished during the horse preference test. However, moderate positive correlations were observed between first product sniffed and consumed (P = 0.01, ф = 0.40) as well as first product consumed and finished (P < 0.01, ф = 0.48), suggesting that olfaction plays a large role in horses food choice. Consumers rated Product A lower in appearance (P < 0.01), texture (P < 0.01), and size (P < 0.01), though no difference was observed between products for aroma. Additionally, consumers rated Product A lower for purchase intent (P < 0.01), indicating aroma may not play as large of a role in product selection as visual attributes. These results indicate that both horse and consumer preference should be evaluated during product development.

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Dafermos, Yannis. "Liquidity preference, uncertainty, and recession in a stock-flow consistent model." Journal of Post Keynesian Economics 34, no. 4 (July 1, 2012): 749–76. http://dx.doi.org/10.2753/pke0160-3477340407.

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Mester, Loretta J. "Testing for Expense Preference Behavior: Mutual versus Stock Savings and Loans." RAND Journal of Economics 20, no. 4 (1989): 483. http://dx.doi.org/10.2307/2555729.

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Kono, Kazuyo. "Effects of dried bonito stock on the flavor preference and health." Journal for the Integrated Study of Dietary Habits 23, no. 3 (2012): 131–36. http://dx.doi.org/10.2740/jisdh.23.131.

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BISWAS, ANINDYA, and BISWAJIT MANDAL. "ESTIMATING PREFERENCE PARAMETERS FROM STOCK RETURNS USING SIMULATED METHOD OF MOMENTS." Annals of Financial Economics 11, no. 01 (March 2016): 1650005. http://dx.doi.org/10.1142/s2010495216500056.

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This study proposes a new way of solving standard dynamic problem based on Simulated Method of Moments (SMM) approach. It uses a newly introduced model of stock returns involving latent state variables and the regime-switching fundamentals and estimates three key preference parameters namely the Coefficient of Relative Risk Aversion, the Elasticity of Intertemporal Substitution and the subjective discount factor by suitably applying SMM and without directly using noisy consumption data. The estimates we found here seem to be relatively better than prevalent studies and very close to the true values of the parameters.

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Alves, Carlos, and Victor Mendes. "Mutual funds biased preference for the parent's stock: evidence and explanation." Applied Financial Economics 20, no. 16 (August 2010): 1309–20. http://dx.doi.org/10.1080/09603107.2010.491439.

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Journal articles on the topic 'Preference stock'

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