Finance and Financial Management Commons^™

Stock Returns And Noise Trading: Domestic And International Evidence, Rahul Verma

Theses and Dissertations - UTB/UTPA

In recent years there has been a growing debate on the possible linkages between the behavioral aspects of investors and stock prices. The financial economics have become more receptive to imperfect rational explanations and in this regard, investor psychology has emerged as a major determinant of stock prices. Under this approach, the central task is to examine how stock prices are related not only to risks, but also to the noise (Hirshleifer, 2001). After decades of study, the sources of risk premium in purely rational dynamic models are well understood; while, dynamic psychology based asset pricing theories are still in …