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Otc Quote Size.Kemerey.Thesis.Pdf, Kemerey Thompson Apr 2019

Otc Quote Size.Kemerey.Thesis.Pdf, Kemerey Thompson

Kemerey Thompson

I examine the effects of a change in the minimum quotation size on liquidity and volatility in the modern over-the-counter (OTC) markets. On November 12, 2012, the Financial Industry Regulatory Agency (FINRA) introduced a pilot program to adjust the minimum quote sizes for securities transactions in the OTC markets. I find that an increase in the minimum quote size decreases OTC market quality as spreads widen and volatility increases. In contrast, I find that a decrease in the minimum quote size improves OTC market quality, but the results are sensitive to the price of the security. These results offer important …

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Termination Risk And Managerial Risk Taking, Atreya Chakraborty, Shahbaz A. Sheikh, Narayanana Subramanian Feb 2007

Termination Risk And Managerial Risk Taking, Atreya Chakraborty, Shahbaz A. Sheikh, Narayanana Subramanian

Atreya Chakraborty

We test the hypothesis that managers who face a high termination risk make less risky investments than the managers who face a low termination risk. A 10% increase in our measure of termination risk is associated with a 5%–23% decline in stock returns volatility for the median firm in our sample. We also find that for CEOs who are more likely to be fired in the event of investment failure, the inhibiting effect of termination risk appears to offset the positive effect of convexity of managerial compensation on managerial risk taking. These results are robust to alternative definitions of forced …

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