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Extrapolative beliefs and return predictability: Evidence from China

Journal of Behavioral and Experimental Finance, ISSN: 2214-6350, Vol: 43, Page: 100957
2024
  • 0
    Citations
  • 0
    Usage
  • 9
    Captures
  • 1
    Mentions
  • 0
    Social Media
Metric Options:   Counts1 Year3 Year

Metrics Details

  • Captures
    9
  • Mentions
    1
    • News Mentions
      1
      • 1

Most Recent News

Findings from Central University of Finance and Economics Provides New Data about Behavioral and Experimental Finance (Extrapolative Beliefs and Return Predictability: Evidence From China)

2024 NOV 07 (NewsRx) -- By a News Reporter-Staff News Editor at Daily China News -- Current study results on Business - Behavioral and Experimental

Article Description

We explore the role of extrapolative beliefs in return predictability in the Chinese stock market. Extrapolation-based theories suggest that the return predictability arises from the eventual correction of mispricing caused by extrapolators, particularly during periods of high extrapolative beliefs. Our findings support this notion, indicating that greater extrapolative beliefs strengthen the return predictability of valuation ratios. Mechanism analyses reveal that extrapolative beliefs influence the mean-reversion and investor sentiment.

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