The Closed End Fund Puzzle

Andrei Shleifer

in Inefficient Markets

Published in print March 2000 | ISBN: 9780198292272
Published online November 2003 | e-ISBN: 9780191596933 | DOI:

Series: Clarendon Lectures in Economics

The Closed End Fund Puzzle

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

Chapter.  11414 words.  Illustrated.

Subjects: Financial Markets

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