3. The Closed End Fund Puzzle

Author: Shleifer, Andrei

Source: Inefficient Markets, March 2000 , pp. 53-89(37)

Publisher: Oxford Scholarship Online Monographs

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Abstract:

Begins by describing the closed end fund puzzle and enumerating some of the standard accounts that have been used to explain it. Then, applying the model developed in the previous chapter, the author comes to the conclusion that the apparent puzzle could be interpreted in terms of the influence of (individual) investors sentiments on securities prices. This interpretation, in turn, provides some useful hypotheses that are tested with evidence from the US, proving that behavioural finance theory can provide testable predictions.

Keywords: financial market; returns; mutual funds; US; investors sentiments; security price; behavioural finance; closed end puzzle

Document Type: Research article

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