Is it inefficient investment that causes the diversification discount?

Article Abstract:

The diversification discount, in which the stock prices of diversified conglomerates are less than those of pure play firms, is held by recent research to be the result of capital spending inequities across divisions. New research indicates there may be measurement errors in the corpus of research.

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Counterparty risk and the pricing of defaultable securities

Article Abstract:

Reduced-form models incorporating a paradigm for calculating the corporate bond default risk of financial counterparties is presented. Counterparty risks are those risks specific to an individual issuer.

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Discussion

Article Abstract:

A response to Albert S. Kyle and Wei Xiong's 'Contagion as a wealth effect' is presented. Kyle and Xiong's research indicates that portfolio position sizes are a critical variable effecting returns.

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