You are not currently logged in.
Access JSTOR through your library or other institution:
If You Use a Screen ReaderThis content is available through Read Online (Free) program, which relies on page scans. Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Affect in a Behavioral Asset-Pricing Model
Meir Statman, Kenneth L. Fisher and Deniz Anginer
Financial Analysts Journal
Vol. 64, No. 2 (Mar. - Apr., 2008), pp. 20-29
Published by: CFA Institute
Stable URL: http://www.jstor.org/stable/40390111
Page Count: 10
You can always find the topics here!Topics: Business structures, Investment risk, Investors, Financial portfolios, Expected returns, Statistical significance, Growth stocks, Behavior modeling, Momentum, Efficient markets
Were these topics helpful?See something inaccurate? Let us know!
Select the topics that are inaccurate.
Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Preview not available
Stocks, like houses, cars, watches, and other products, exude "affect"—that is, they are considered good or bad, beautiful or ugly; they are admired or disliked. Affect plays an overt role in the pricing of houses, cars, and watches, but according to standard financial theory, it plays no role in the pricing of financial assets. This article outlines a behavioral asset-pricing model in which expected returns are high not only when objective risk is high but also when subjective risk is high. High subjective risk comes with negative affect. Investors prefer stocks with positive affect, which boosts the prices of such stocks and depresses their returns.
Financial Analysts Journal © 2008 CFA Institute